Investment Strategy

Mezzanine Loans

<< Types of Loans

Eligible Properties
Multifamily, retail, industrial, office, hospitality, and condominium projects/properties for the following types of investments: development; construction; recapitalizations; renovations; acquisitions.
Eligible Locations
50 states and most parts of Canada. Markets with strong market fundamentals in place including small markets where project economics and collateral are compelling.
Loan Amount
$500,000 – $10 million with larger transactions being considered on a case-by-case basis.
Depending upon project dynamics, sponsor suitability and deal structure rates will fall between 10% and 18% on a fixed or floating rate, interest only basis. Accrual options may also be available.
Terms from 1 month to 36 months (extension options available)
Deal Structure
True mezzanine debt secured by member/ownership interests inside or one tier above property owning entity with a standard inter-creditor agreement. Alternative structures available such as subordinated lease-backs, full equity participation as evidenced by priority returns, or other creative structures providing increased leverage for the borrower.
Up to 90% of the capital structure for coupon debt, higher leverage for mezzanine debt with profit participation. There is no minimum debt coverage ratio. A minimum sponsor co-investment of 5% – 10% is typically required. Each transaction is based upon valuation of all underlying collateral and sponsor.
Origination fees vary based upon loan terms but typically range from 2-3% of loan amount. Standard third party reports may be required if not available from the senior lender.
Time Frames
Closing and funding mezzanine loans within 30 days with some transactions able to be closed within 15 days if all third party reports are available and reasonably acceptable to Red Pine.

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