Mezzanine Loans
High Leveral capabilities. RECC provides mezzanine loans that are generally subordinate to senior debt and offer additional leverage beyond conventional loan programs. Eligible property types include Office, Industrial, Retail, Mixed Use, and Hospitality.
Typical Uses include:
- Gap financing on new or existing mortgage loans
- Partnership buyout / equity recapitalization
Program Advantages
Purchase, refinance, discounted payoff, and 1031 Exchanges
- Leverage up to 90% LTV
- Build all closing costs into the new loan
- Interest-Only during loan term
- Note rate may be structured as Current Pay plus Interest Accrual
- Loan term up to 3 years
Program Parameters
| ELIGIBLE PROPERTY TYPES | Multifamily, Office, Retail, Hospitality, Industrial, Mixed Use. No land developments. |
| COLLATERAL: | Asset or Note. |
| LOAN AMOUNT: | $5,000,000 minimum - $30,000,000 maximum. |
| MINIMUM DSCR: | 1.0x As-Is / 1.25x As-Stabilized |
| MAXIMUM LTV: | 90% As-Stabilized |
| LOAN TERM: | Up to 3 years. |
| AMORTIZATION: | All loans are Interest Only. |
| RECOURSE: | Typically non-recourse, subject to standard carveouts. |
| PREPAYMENT: | No prepayment penalty; minimum interest guaranty may apply. |
| INTEREST RATE: | Starting at 8%; may be comprised of Current Pay Rate and Accrued Interest (IRR Look-back). |
| ASSUMABLE: | Loans are not assumable. |
| SUBORDINATE FINANCING: | N/A |
| CLOSING TIMEFRAME: | 21 to 30 days. |
| APPLICATION DEPOSIT: | Covers estimated transaction costs (including Processing Fee). |
| ORIGINATION FEE: | Typically 2-3 points. |
| LOAN FEES: | Borrower will be required to make a “Good Faith Deposit” in the amount of $40,000 upon execution of the Term Sheet. The Good Faith Deposit shall cover the cost of the Appraisal; Phase I Environmental and Property Condition Report; plus $5,000 non-refundable application fee; and $5,000 non-refundable underwriting fee. |
| TAX AND INSURANCE ESCROWS: | May be required. |
| REPLACEMENT RESERVES: | Immediate Cap Ex funds may be held in a soft springing lockbox with established account; ongoing Replacement Reserves and TI/LC’s may be waived. |
| INTEREST RESERVE: | May be required for loans with negative debt service during stabilization. |
| REQUIRED REPORTS: | Self-Contained Narrative Appraisal, Property Condition Assessment and Phase I Environmental. |
| SPONSORSHIP: | Good overall credit with sufficient liquidity & demonstrated experience with similar projects. No mortgage lates, bankruptcies, or public records; case-by-case basis. |
| DOCS NEEDED FOR APPLICATION: |
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To take full advantage of your lending opportunities, start with one of our lending specialists.
Call us at (704) 350-5071.
