Today's Mezzanine Financing Rates — June 2026

As of June 21, 2026, institutional mezzanine prices to an all-in return of roughly 11–16%, typically a current-pay coupon of 10–13% plus PIK of 1–4%, sometimes with warrants or an equity kicker. Real estate mezzanine on stabilized assets prices 10–13%; corporate/LBO and growth mezzanine 12–16%. Deals run $5M–$50M+ with a 1–2% advisory/placement fee.

From three components: a cash current-pay coupon of roughly 10–13%, PIK interest of 1–4% 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 11–16%. 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 60–65% senior LTV up to roughly 75–80% 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 60–65% gold-standard LTV; mezzanine then layers on top to a combined position around 75–80% 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–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 (11–16%), but remedy mechanics, control rights, and senior-lender consent differ materially.

Institutional mezzanine is generally a $5M–$50M+ product, deepest between $10M and $100M. Below roughly $3M–$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 + 5.50–8.00%, or ~10–13% 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 1–2% 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.