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Catch-22 in Mezzanine Lending

Mezzanine lenders are tripping over each other in their haste to accommodate hungry borrowers. Each week brings news of another commercial real estate fund amassing capital to make or acquire mezzanine loans, which are secured by the stock of the company that owns the property rather than by the real estate itself. There is plenty of demand for such loans, too, as investors attempting to refinance or acquire properties struggle to increase their leverage beyond the 75% loan-to-value ratio typically available from senior mortgage providers today. Yet experts say mezzanine lending is being squeezed out of the capital ...

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