Hotel and hospitality financing can be quite daunting and complex for new and experienced investors and managers. Whether you are acquiring an existing asset, constructing from the ground up, rehabbing or repurposing a project, the capital structure can vary greatly.
What is Commercial Mezzanine Financing?
There is an order or hierarchy to this type of financing. If you picture a pyramid or triangle, the bottom section represents the senior debt which provides the majority of the financing, the middle section is the mezzanine financing which is the financing that fills the gap between senior debt and equity, and the top of the pyramid is equity financing (the sponsor’s contribution).