Today's Mezzanine Financing Rates, June 2026

As of June 21, 2026, institutional mezzanine prices to an all in return of roughly 11 to 16%, typically a current pay coupon of 10 to 13% plus PIK of 1 to 4%, sometimes with warrants or an equity kicker. Real estate mezzanine on stabilized assets prices 10 to 13%; corporate/LBO and growth mezzanine 12 to 16%. Deals run $10M to $50M+ with a 1 to 2% advisory/placement fee.

From three components: a cash current pay coupon of roughly 10 to 13%, PIK interest of 1 to 4% that accrues to principal and is paid at exit, and an equity component (warrants, small co invest, or success fee) that lifts the lender's IRR. The blended all in target is typically 11 to 16%. The structure keeps cash service manageable while the lender reaches an equity like return for subordinated risk.

Between senior debt and common equity, subordinated to the senior loan but senior to sponsor equity. In CRE it bridges the gap above a 60 to 65% senior LTV up to roughly 75 to 80% of value on a combined basis, filling the slice equity would otherwise cover. Because it is subordinated, it is priced as quasi equity and governed by an intercreditor agreement with the senior lender.

On CRE a senior loan tops out at a 60 to 65% gold standard LTV; mezzanine then layers on top to a combined position around 75 to 80% on cash flowing stabilized assets, never to 100%, with the sponsor still contributing meaningful equity. In corporate/LBO settings, mezzanine is sized by leverage multiples (total debt/EBITDA), often filling the 3.5x to 5.0x layer above the senior. Attachment/detachment is set deal by deal.

Mezzanine debt is a loan, it sits as debt, is secured (often by a pledge of equity interests rather than a mortgage), and carries an intercreditor agreement. Preferred equity is an equity investment with a preferred return, structurally below mezzanine, exercised through equity ownership remedies rather than foreclosure. Pricing overlaps (11 to 16%), but remedy mechanics, control rights, and senior lender consent differ materially.

Institutional mezzanine is generally a $5M to $50M+ product, deepest between $10M and $100M. Below roughly $3M to $5M the diligence and legal cost makes dedicated mezzanine inefficient, so sponsors use additional equity, a preferred equity co invest, or a stretch senior/unitranche structure. The largest tranches on trophy real estate and large LBOs run well past $100M in a syndicated stack.

Unitranche blends senior and subordinated debt into a single facility at one blended rate (often SOFR + 5.50 to 8.00%, or ~10 to 13% all in in June 2026), from one lender, avoiding a separate intercreditor agreement. It is faster and simpler than senior plus mezzanine and common in middle market private credit LBOs. Standalone mezzanine still wins when a borrower wants to keep cheap senior debt in place and only fill the subordinated gap.

Institutional mezzanine and subordinated debt placements typically carry a 1 to 2% advisory/placement fee on the committed amount, paid at closing. The advisor structures the layer, runs a competitive process across mezzanine funds and direct lenders, and negotiates intercreditor terms. On a $20M tranche, a 1.5% fee is $300,000, generally well below the value created by tightening the coupon, reducing the kicker, or improving terms.