Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate

Mezzanine Loan and Commercial Real Estate In today’s commercial real estate environment, a typical capital structure for a real estate transaction may include mezzanine debt to fill the gap between a senior mortgage and the borrower’s equity in the property.

A mezzanine loan is not a real estate loan. Instead, a mezzanine loan is loan that is secured by the membership interests (think of this as shares) of an LLC (think of this as a corporation) that owns a huge real estate project. If you own all of a company and the company owns all of the property, then you own all of the property. Let’s discuss below how a “mezz piece” forecloses. Mezzanine Foreclosure: A “UCC” (Uniform Commercial Code) process

  • This is an administrative judicial process done in a court proceeding
  • The lender ‘instantly’ becomes the borrower
  • Unsecured liens are wiped out or ‘cleansed’ at the foreclosure process

The commercial real estate market is rapidly evolving. Often, traditional lenders are too bogged
down with red tape and stringent loan requirements to provide the necessary flexibility to handle
challenging financing solutions. At Linton Global, we recognize the importance of finding
creative solutions to non-conforming opportunities in an expedited manner. Feel free to contact
us at (312) 612-1031 to discuss any commercial real estate scenarios.

Mezzanine Loan and Commercial Real Estate