In the boom years, mezzanine financing—debt that fills a gap between senior financing and equity—was a hot spot for some capital providers. The sector cooled considerably after the financial crisis set in. But 2012 may go down as the year mezzanine lenders came back in a big way due to a constellation of factors coming into line.
Most significantly, 2012 will be marked by an uptick in maturities of existing debt, creating a big demand for refinancing. And with senior lenders more conservative than they were before, mezzanine lenders will have an ability to fill the capital stack for qualified borrowers. Moreover, the continued increases in investment sales and, in some cases, development, are also places mezzanine debt can play a role. “Mezz lenders feel there will be good opportunities in 2012,” says Mitchell W. Kiffe, co-head of national production for the debt & equity finance group within CBRE Capital Markets. “There’s an avalanche of maturities coming due, and that’s why a lot of people in the space think the market is going to come to them.”
Read more...Mezzanine Lenders Look Forward to a Big Year via NREIonline.com
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