Fill the gap in your capital stack with competitive mezzanine debt and preferred equity structures. Independent advisory with no ties to any capital source — we work for you.
Every deal has layers. Senior debt provides the foundation, but maximum leverage requires filling the gap with mezzanine debt or preferred equity. We help you structure the entire stack.
Traditional lenders max out at 60-70% LTV. That gap between senior debt and your equity leaves money on the table and forces you to give up more control.
Mezzanine and preferred equity solutions let you:
We source and structure the right solution for your deal, with competitive terms and experienced capital partners.
Subordinated loans that sit between senior debt and equity, secured by a second lien on the property or a pledge of the operating company.
Preferred equity structures provide subordinated return priority while avoiding senior debt restrictions. Tax-efficient alternative to mezzanine loans.
We connect developers with institutional and private equity partners for joint ventures on acquisitions, development, and value-add plays.
Custom capital solutions for complex deals that traditional lenders won't touch — A/B notes, participation loans, and hybrid structures.
These are the deals where mezzanine and preferred equity unlock value and speed execution.
Buying a stabilized asset at market cap rates? Senior debt only gets you to 65-70% LTV. Mezzanine closes the gap so you can own more of the deal with less equity required.
AcquisitionsConstruction loans have a loan-to-cost limit, and perm loans take 90+ days to close. Mezzanine bridges the construction-to-permanent transition, paying off from perm takeout.
ConstructionAfter repositioning a property, the NOI has grown and the perm lender will give more leverage. Preferred equity lets you pull cash without additional senior debt leverage.
RecapsNeed to buy out a partner or bring in a new equity sponsor? Preferred equity or JV structures let you add capital without breaking existing senior debt covenants.
Equity TransitionsGround-up development often needs bridge financing early, then mezz to cover cost overruns and soft costs. Preferred equity takes you through lease-up.
DevelopmentRefinancing 5-10 properties at once? You might have LTV gaps or timing mismatches. Preferred equity lets you unlock value across the whole portfolio.
PortfolioWe have zero financial incentive to push mezzanine on you if senior debt makes more sense, or to favor one capital source over another. We work for you — not the lender's quota.
Mezzanine debt is a subordinate loan that sits between senior debt and equity in the capital stack. It's typically secured by a second lien on the property or a pledge of the operating company's equity. Mezzanine fills the gap when senior debt max-LTV falls short of your total capital needs, allowing you to increase overall leverage without additional equity contribution.
Preferred equity is an equity investment that has a preferred return priority—typically 8-12% distributions—senior to common equity but subordinate to all debt. Unlike mezzanine (which is debt), preferred equity has no financial covenants, no recourse obligations, and is tax-efficient for many investors. It bridges the gap between debt and common equity in the capital stack.
Use mezzanine or preferred equity when you need more leverage than senior debt provides but don't want to dilute ownership with additional common equity. Perfect scenarios include acquisitions at lower cap rates, value-add recapitalizations, construction gap funding, and higher-leverage deals where you want to maintain control while maximizing returns.
Mezzanine debt typically yields 10%-15%, depending on deal risk, property position in the capital stack, sponsor experience, and deal size. Rates vary based on leverage, subordination level, and market conditions. Preferred equity typically targets 8-12% preferred returns, with upside participation in common equity returns at exit.
A second mortgage is a real estate loan secured by a second lien on the property itself. Mezzanine is typically secured by a pledge of the company's ownership interests (equity), not the property directly. This structural difference affects underwriting, intercreditor negotiations, and foreclosure processes. Mezzanine is also more flexible and may carry fewer covenants than a traditional second loan.
Absolutely. Modern capital stacks often layer multiple sources: senior debt (60-70%) + mezzanine (10-15%) + preferred equity (5-10%) + common equity (5-10%). This structure maximizes leverage while aligning incentives across the stack. We specialize in complex, multi-layer capital structures that work for your deal and satisfy all investors' return requirements.
Whether you need gap funding, higher leverage, or a creative capital structure — we'll find the solution that works.