CalculateRealEstateROI

Commercial Real Estate

Mezzanine Debt

Subordinated debt secured by pledge of equity interest rather than the property itself.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

Higher cost than senior debt; faster foreclosure remedy if it defaults.

Examples

  • 10% mezz loan filling gap between senior (65% LTV) and required equity.

Common mistakes

  • Stacking mezz on already-thin coverage ratios.

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