Has anyone used mezzanine debt financing / can speak to rates charged?

by a searcher from University of Pennsylvania - The Wharton School

3 years ago

Looking to finance small hotel deals and curious to required rate of returns mezz lenders and preferred equity investors are looking for  nowadays.

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searcher from The University of Chicago - Booth School of Business

@daniel happy to connect on this for hotel cap structure fill-in.

3 years ago | like reply | 0 likes

searcher from University of Pennsylvania - The Wharton School

Not sure on preferred - but sub debt that I have seen has been quoted at 15-18%. 15% being the the required payment with 3% in PIK notes to get to an all-in cost of 18%. Those numbers are what I have seen for middle-market business acquisition financing. Real estate is a distinct vertical, and probably has lower rates. Perhaps closer to 12-15%. Agreed though that hospitality has been gutted, which will likely create opportunities of its own.

3 years ago | like reply | 1 like

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