Mezzanine Debt in Commercial Real Estate: Tips and Trends

Mezzanine debt is a financing vehicle that typically serves as a bridge between debt and equity in a borrower’s capital stack. While more expensive than a senior mortgage loan, mezzanine debt is often less expensive than equity and allows the borrower a certain amount of flexibility, including the ability to maintain control over the property. In this article, associate Amiel Mandel and former Schulte lawyer Bruce Cybul and discuss mezzanine lending in a commercial real estate context, including key areas of focus for attorneys when negotiating mezzanine loan documents and the current state of the market.