Mezzanine Debt for Development Sites
Quick answer
Kismet Kapital structures mezzanine financing for development sites at 80–85% LTC, typically closing in 30–60 days. Lender focus on sponsor track record, GC strength, fixed-price contracts, contingencies, and exit underwriting.
- Product
- Mezzanine Debt
- Asset Class
- Development
- Typical Leverage
- 80–85% LTC
- Typical Close
- 30–60 days
- Term
- Co-terminus with senior, typically 2–7 years
- Recourse
- Non-recourse with intercreditor
Overview
Ground-up development capital is the most structured area of CRE finance — combining senior construction debt, mezzanine, preferred equity, and JV equity. Mezzanine debt is structured behind senior debt and secured by an equity pledge in the borrower entity. It enables sponsors to reach total leverage that exceeds what a senior lender will provide. For development sites, mezzanine proceeds are sized against lender focus on sponsor track record, gc strength, fixed-price contracts, contingencies, and exit underwriting. sub-debt and preferred equity routinely fill the gap between senior ltc and sponsor co-invest.
Why sponsors use Kismet Kapital for development mezzanine capital
development transactions are typically capitalized with Construction, Mezzanine, Preferred Equity, JV Equity. Kismet Kapital identifies which of those structures the current lender market will actually fund for your business plan, then runs a competitive process across the desks pricing development risk today.
Terms at a glance
- 80–85% LTC typical proceeds for mezzanine on development sites.
- Executions generally close in 30–60 days.
- Current pay plus accrual, governed by an intercreditor agreement.
- Common structures: Construction, Mezzanine, Preferred Equity, JV Equity.
- Acquisition top-up behind senior debt
- Construction sub-debt
Key facts
Kismet Kapital typically closes mezzanine financing on development sites in 30–60 days.
Mezzanine Debt for development sites generally size to 80–85% LTC.
Development capital stacks commonly include Construction, Mezzanine, Preferred Equity, JV Equity.
Frequently asked questions
What leverage is available on mezzanine financing for development sites?
Mezzanine Debt for development sites typically size to 80–85% LTC, with the exact proceeds driven by in-place income, business plan, and sponsor experience.
How long does a mezzanine loan on development take to close?
Most development mezzanine executions close in 30–60 days from signed term sheet.
How do lenders underwrite development sites?
Lender focus on sponsor track record, GC strength, fixed-price contracts, contingencies, and exit underwriting. Sub-debt and preferred equity routinely fill the gap between senior LTC and sponsor co-invest.
What capital structures work best for development sites?
Development Sites are typically capitalized with Construction, Mezzanine, Preferred Equity, JV Equity. Kismet Kapital engineers the mix that maximizes proceeds without breaking the business plan.
When is mezzanine the right product for an development deal?
Subordinate debt that sits between senior debt and equity to increase total leverage. It fits development transactions such as acquisition top-up behind senior debt and construction sub-debt.
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