Investors borrowed $40 million from Natixis to buy and redevelop 19 Chapin Rd., a light industrial campus in Montville, NJ.

October 17, 2017 Comments Off on Mezz Debt for Smaller Properties Views: 689 Downtown New York, New York News

Mezz Debt for Smaller Properties

Borrowers are finding new ways to pile more permanent debt onto smaller properties. Greystone now offers a mezzanine conduit loan through its commercial mortgage-backed securities (CMBS) lending platform.

“This mezzanine loan product meets a need for capital that is overlooked by traditional providers of mezzanine financing due to the smaller size – yet it’s still a critical component of the capital stack,” said Rob Russell, head of CMBS production at Greystone.

These mezzanine, nonrecourse loans range from as small as $500,000 up to $5 million, and, when paired with permanent financing, can create a loan package that covers up to 85% of the value of a property. Interest only loans are available, with coupon interest rates varying from 12% to 15%, depending on the leverage, market and sponsor.

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