News June 19, 2020
Senior Lenders: Mezz Comes First
Commercial Mortgage Alert reported that real estate developers will have to shift gears from the pari-passu distribution of funds that was widely expected pre-COVID, and be prepared for the subordinate, or mezzanine, portion of the debt package be fully funded first. Madison Realty Capital Managing Principal, Co-Founder Josh Zegen explained that the sequential structure has become “the new norm over the last few months, it’s a lot more costly from a borrower perspective,” noting that lenders have also generally raised rates and reduced leverage for new debt up and down the capital stack. MRC is active nationwide, with loan amounts from $5-500 million.