Mezzanine ("mezz debt") is a hybrid security of debt and equity placed in a second-lien position behind a senior secured lender — used when a borrower cannot achieve sufficient LTV through senior financing alone.
Mezzanine debt sits between senior secured debt and equity in the capital stack. Because it carries more risk than the senior loan — it is only repaid after the senior lender is satisfied — it commands a higher interest rate. In exchange, the lender may receive equity participation rights (warrants) in addition to a fixed coupon.
For borrowers, mezz debt is a tool to close the gap between the maximum LTV a senior lender will provide and the total capital needed to complete an acquisition or refinance. It is most commonly paired with CMBS financing and used for investment properties.
| Term | Fixed Rate | Floating Rate | Max LTV* | Max Amortization |
|---|---|---|---|---|
| 5 Years | 7.23% - 11.23% | N/A | 75% - Investment | 30 Years |
| 7 Years | 7.52% - 11.52% | N/A | 75% - Investment | 30 Years |
| 10 Years | 7.87% - 11.87% | N/A | 75% - Investment | 30 Years |
Note: The commercial mortgage rates displayed on this page should be used as a guideline and do not represent a commitment to lend. Rates may change at any time and without notice.
Loan Amount: $1,000,000+
* Not available for all property types or areas
** Usually used in conjunction with CMBS loans, following the same underwriting standards
Example: A $10M property with a senior lender at 65% LTV ($6.5M) leaves a $3.5M gap before the borrower's equity. Mezzanine financing can bridge that gap, allowing the borrower to put in less cash while still closing the transaction.
Ready to explore mezzanine financing for your commercial property? Our team will match you with the right lender and structure for your transaction.
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