Navigating Commercial Real Estate Financing: Debt, Mezzanine, and Equity Options

Greg Wilson March 11, 2025Last Updated: March 12, 2025

13 2 minutes read

Navigating Commercial Real Estate Financing Debt, Mezzanine, and Equity Options

Securing the right financing is crucial for any commercial real estate project. Whether you’re acquiring land, building a multi-family complex, or refinancing an existing property, understanding your financing options is essential. This lender provides three key financing avenues: debt, mezzanine, and equity, we will highlight the terms and structures offered by a specific lender.

Debt Program: A Foundation for Commercial Real Estate

For many commercial real estate ventures, traditional debt financing serves as the cornerstone. This program offers:

Loan Size: $1 million to $15 million, catering to a range of project sizes.
Interest Rates: Starting from 9%, providing competitive pricing.
Loan Terms: Up to 36 months, offering flexibility for various project timelines.
Loan-to-Cost (LTC): Up to 80%, allowing for significant leverage.
Loan-to-Value (LTV): Up to 70%, ensuring a balanced risk profile.
Eligible Property Types: All types of commercial real estate encompassing a wide array of assets.
Geographic Focus: AZ, CA, NV, TX, UT, NM, CO, targeting key Western states.
Project Types: Construction, land acquisition, and multi-family developments.

This debt program provides a solid foundation for commercial real estate projects, offering competitive terms and a broad range of eligible property types.

Mezzanine Program: Bridging the Gap

When traditional debt financing falls short, mezzanine financing can bridge the gap. This program offers:

Loan Size: $1 million to $10 million, providing supplemental capital.
Interest Rates: Starting from 13%, reflecting the increased risk.
Loan Terms: Up to 3 years, aligning with project timelines.
Security: 100% pledge of ownership interest and/or second lien, offering lender protection.
Loan-to-Cost (LTC): Up to 80%, providing significant leverage.
Prepayment: Deal-specific terms allow for flexibility.
Uses: Acquisition, recapitalization, construction, and refinancing, catering to diverse needs.
Eligible Property Types: All types of commercial real estate encompassing a wide array of assets.

Mezzanine financing provides a valuable tool for bridging capital gaps and completing projects with complex financing needs.

Equity Program: Partnering for Success

For projects requiring a more collaborative approach, equity financing offers a partnership model. This program offers:

Investment Size: $1 million to $10 million, providing significant capital infusion.
Pricing: IRR calculations are asset-specific, reflecting the unique nature of each deal.
Investment Structure: Preferred and joint venture, offering partnership opportunities.
Eligible Property Types: All types of commercial real estate encompassing a wide array of assets.

Equity financing allows for a shared risk and reward model, fostering strong partnerships and aligning interests.

Choosing the Right Financing Option

Selecting the appropriate financing option depends on your specific project needs and risk tolerance. Debt financing provides a stable foundation, mezzanine financing bridges capital gaps, and equity financing offers a partnership approach. Carefully evaluate your options to determine the best fit for your commercial real estate venture.

Disclaimer: This blog post provides a general overview of financing options and should not be considered financial advice. Consult with a qualified professional to determine the best financing strategy for your specific needs.