Mezzanine & Preferred Equity Solutions

Mezzanine Financing & Preferred Equity

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.

$2B+
Transaction Volume
200+
Deals Closed
20+
Years Experience
50
States Served
Understanding Capital Structure

The Capital Stack Explained

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.

Senior Debt (First Lien)

60-70% of project cost • Lowest rate • First position

Mezzanine Debt

Subordinate loan • Intercreditor agreement • Higher yield

Preferred Equity

Priority returns • Tax efficiency • No recourse debt

Common Equity

Residual ownership • Highest return potential

Why Mezzanine & Preferred?

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:

  • Increase leverage Get to 80-85% total financing without additional equity
  • Retain control Close the gap without diluting your ownership stake
  • Improve returns Structure preferred equity for tax-efficient payouts
  • Speed execution Non-bank capital sources close faster than traditional lenders
  • Customize terms Flexible structures tailored to your deal and sponsors
Our Capital Solutions

Mezzanine & Preferred Equity Options

We source and structure the right solution for your deal, with competitive terms and experienced capital partners.

Mezzanine Debt

Subordinated loans that sit between senior debt and equity, secured by a second lien on the property or a pledge of the operating company.

  • Loan amounts: $5M to $75M+
  • Terms: 3-7 years fixed or floating
  • Intercreditor agreements with senior lender
  • Fixed or accrued interest structures
  • Yield: 8-14% (depending on deal risk)

Preferred Equity

Preferred equity structures provide subordinated return priority while avoiding senior debt restrictions. Tax-efficient alternative to mezzanine loans.

  • Amounts: $3M to $50M+
  • Priority returns: 8-12% distributions
  • No financial covenants or recourse
  • Pref multiples and catch-up provisions
  • Clean exit: refinance or sale

JV Equity Partnerships

We connect developers with institutional and private equity partners for joint ventures on acquisitions, development, and value-add plays.

  • Institutional capital for large deals
  • Co-development and co-operation models
  • Sponsor partnership on recaps and buyouts
  • Ongoing investor relations management
  • Equity structures: 50/50 to 90/10

Structured Finance

Custom capital solutions for complex deals that traditional lenders won't touch — A/B notes, participation loans, and hybrid structures.

  • A/B note splits with institutional buyers
  • Participation loans with upside kickers
  • Hybrid debt-equity arrangements
  • Sale-leaseback and refinance structuring
  • Non-recourse and limited-recourse options
When You Need Mezzanine & Preferred Equity

Common Deal Scenarios

These are the deals where mezzanine and preferred equity unlock value and speed execution.

Higher Leverage Acquisitions

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.

Acquisitions

Construction Gap Funding

Construction 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.

Construction

Value-Add Recapitalizations

After 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.

Recaps

Partner Buyouts & Sponsor Changes

Need 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 Transitions

Development Projects with Staged Funding

Ground-up development often needs bridge financing early, then mezz to cover cost overruns and soft costs. Preferred equity takes you through lease-up.

Development

Portfolio Refi Gaps

Refinancing 5-10 properties at once? You might have LTV gaps or timing mismatches. Preferred equity lets you unlock value across the whole portfolio.

Portfolio
&
Why Banyan

Truly Independent Advisory

We 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.

  • No Ties to Capital Sources We advise on the best fit, not the lender we're affiliated with
  • Full Capital Stack Expertise Senior debt, mezz, preferred equity, JV — we know every layer
  • Deep Lender & Investor Relationships Decades of relationships that unlock competitive terms and certainty
  • $10M-$50M+ Deal Sweet Spot We focus on the deals where personal attention and expertise matter most

Ready to Close Your Next Deal?

Whether you need gap funding, higher leverage, or a creative capital structure — we'll find the solution that works.