Joel's Twitter Feed
- Multifamily Lenders Share Their Biggest Concerns For The Road Ahead - http://nreionline.com/news/multifamily_lenders_biggest_concerns_0203/
- The Niche Report - Bridge Loans by Andrew Bogdanoff: http://bit.ly/8cL9Ig via @addthis
- CMBS Delinquency Could Peak at 12%: http://bit.ly/8GMPdG via @addthis
- Remington Financial Group, Inc. - New Distressed Owner and Debt Opportunities Program, http://hubpages.com/t/db8c6
- Remington Financial has two new webinars are available for brokers to help find and structure new financing options for distressed owners.
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Types of Mezzanine Financing Available via Remington
This week I started 2010 with a newsletter on mezzanine financing. If you’re interested in signing up for my personal newsletter, please contact me. An abridged version is shown here.
Whatever type of mezzanine financing you may need, the professional advisory team at Remington has the know-how and experience to successfully structure any type of transaction and provide access to the best access to mezzanine financing available via its global network of private and public sources of capital.
Mezzanine Loans: The most common type of mezzanine financing is straight debt. It is also the easiest to understand. With straight debt, the mezzanine lender is in a subordinate position, usually up to 85% LTV, with no equity participation in the cash flow and no management participation. Depending on the amount of leverage, the type of project, and owner history, yields will typically fall within the 9-13% range, with terms similar to the senior debt.
Participating Loans: If higher leverage is the objective and borrowers are willing to give up some cash flow or equity for it, a hybrid form of a participating debt instrument may be the way to go. With such debt, borrowers can usually boost LTV up to 90%, while lenders generally receive a slightly lower coupon rate on the note but may receive an exit fee when the property sells. Given the increased risk assumed by the lender from the amount of leverage involved, a higher overall yield is required from the combination of the coupon rate and the equity obtained in the transaction.
Preferred Equity: With preferred equity, the borrower and lender usually enter into a partnership or joint venture agreement. This typically results in the investor gaining some project control, a greater equity position, more risk and a greater return than that provided by a participating loan, and the ability to take over the project in case of default. The borrower, on the other hand, gives up some control in exchange for not having to commit substantial capital to the project.
At Remington we have access to all three of these sources of capital as well as other creative structuring. Please call me at the office and let’s discuss.
Happy New Year! Joel Nathanson – Remington