Mezzanine Rate Tracker · Updated Weekly

Today's Mezzanine Loan Rates — May 2026

Q: What's the typical mezzanine loan structure?

Standard real estate mezz structure: 10-12% cash coupon + 2-4% PIK + sometimes warrants or kicker. Subordinate to senior debt (CMBS conduit, agency, bank) via intercreditor agreement. Attachment point 70-80% LTV, detachment point 80-85% LTV. Term typically 3-7 years. Prepayment lockout 24-36 months. Personal guarantee usually required (limited to bad-boy carve-outs on stabilized deals).

Q: When does mezzanine financing make sense?

Three core use cases: (1) acquisition gap-fill — sponsor short on equity for an attractive deal, mezz fills 5-15% of capital stack. (2) recapitalization — sponsor refinancing senior + extracting partial equity via mezz cash-out. (3) construction completion — senior construction loan caps at 65% LTC, mezz fills 65-80% LTC gap. Math: mezzanine returns 14-18% IRR for the lender vs. 25-35% for equity — sponsor uses mezz to delever equity returns.

Q: What's the difference between mezzanine and preferred equity?

Mezzanine is DEBT — has loan documents, intercreditor with senior, mortgage on equity (pledge of LP/membership interests), default + foreclosure mechanics. Preferred equity is EQUITY — preferred return stated rate, no foreclosure (only equity remedies + voting rights at default), no intercreditor needed. Mezz prices tighter (10-15% vs pref equity 12-18%) because it has lender remedies. Pref equity has more upside via promote splits at exit.

Q: What's the typical mezzanine loan size?

Real estate mezzanine typical size $2M-$50M (institutional credit funds), some operators down to $500K-$2M (smaller specialty mezz lenders). Corporate mezz $5M-$200M. Sweet spot for institutional mezzanine credit funds: $5M-$25M deals where senior is CMBS or agency. Below $5M, smaller mezz operators handle the deal. Above $50M, syndicated structures or multi-tranche placements typical.

Q: How is mezzanine PIK structured?

PIK = Payment-In-Kind. Instead of paying interest in cash monthly, the unpaid interest accrues to the principal balance and compounds. Typical structure: 10-12% cash coupon paid monthly + 2-4% PIK accruing. PIK relieves cash-flow pressure during stabilization or value-add execution but increases payoff balance at exit. Worked example: $5M mezz at 11% cash + 3% PIK over 5 years compounds to ~$5.85M payoff vs. $5M principal at par.

Q: Are mezzanine rates going down in 2026?

Real estate mezzanine rates compressed 50-150 bps from late 2025 to May 2026 as institutional credit funds returned to deployment after Q3 2025 risk-off. SOFR + spread is the primary mechanic — SOFR fell ~25 bps and spreads tightened 25-75 bps depending on deal type. Construction mezz spreads remain widest given timing risk. Forward curves suggest further 25-75 bps compression possible if Fed signals additional rate cuts.

Q: Who are the active mezzanine lenders in May 2026?

Active mezz capital May 2026 (not naming specific firms): institutional credit funds (real estate debt platforms at private equity firms), insurance company debt platforms, family-office direct mezzanine, REIT-affiliated mezz operators, hedge funds with private credit allocation, public BDCs (corporate mezz), and specialized commercial mezzanine operators. PeerSense routes deals based on senior capital structure + sponsor profile + asset class.

Q: Can mezzanine debt be combined with CMBS?

Yes — mezz subordinate to senior CMBS conduit is a common institutional structure. CMBS senior at 65-70% LTV + mezz at 70-80% LTV combined leverage caps at ~80% LTV. Intercreditor agreement defines mezz lender rights at senior default + cure rights + standstill periods. CMBS pool composition reviews mezz attachment for disclosure. Best-execution structures pre-clear intercreditor terms before formal CMBS submission.

Q: What's the prepayment penalty on mezzanine?

Mezzanine prepayment typically structured: lockout 12-36 months (no prepay), then defeasance OR yield maintenance OR step-down. Step-down structures common: 5-4-3-2-1% of principal in years 1-5. Yield maintenance pays present value of remaining interest. Open prepay last 6-12 months of term. Recapitalization mezz often has more flexible prepay than acquisition mezz to facilitate refinance into permanent debt.

Current mezzanine loan rates as of May 1, 2026 across real estate mezz, corporate mezz, recap mezz, and construction mezz. Subordinate to senior debt (CMBS / agency / bank) via intercreditor. Sourced from active institutional credit funds, insurance debt platforms, and family-office mezz capital weekly.

Quick Answer

What are current mezzanine loan rates as of May 1, 2026?

As of May 1, 2026, mezzanine rates by type: real estate mezzanine 10.50–14.50%, corporate mezzanine 11.00–15.00%, recap/sponsor mezzanine 12.00–16.00%, construction mezzanine 13.00–17.00%. Effective all-in cost = cash coupon + PIK accrual (+ sometimes warrants). Typical structure: 70-80% cash pay + 20-30% PIK accrual.

— PeerSense Capital Advisory · Updated May 1, 2026

Mezzanine Rates by Capital Stack Position — May 1, 2026

As of May 1, 2026

Program	Current Rate	Term	Loan Size	Best For
Real Estate Mezz (stabilized)	10.50–14.50%	3-7 yr	$2M – $50M	Behind senior CMBS / agency on stabilized assets
Corporate Mezzanine	11.00–15.00%	5-7 yr	$5M – $200M+	Operating-business growth + acquisition financing
Recap / Sponsor Mezzanine	12.00–16.00%	3-5 yr	$5M – $100M	Refinance + cash-out to sponsor
Construction Mezzanine	13.00–17.00%	24-48 mo IO	$10M – $150M	Behind senior construction at 65-80% LTC
Hotel Mezzanine (post-PIP)	11.50–15.00%	3-5 yr	$5M – $50M	Behind senior CMBS hotel post-stabilization
Multifamily Mezzanine	10.00–13.00%	5-10 yr	$5M – $50M	Behind senior agency multifamily
Industrial Mezzanine	10.50–13.50%	5-7 yr	$5M – $50M	Behind senior CMBS industrial / bank

Real Estate Mezz (stabilized)10.50–14.50%
Term
3-7 yr
Loan Size
$2M – $50M
Best For
Behind senior CMBS / agency on stabilized assets
Corporate Mezzanine11.00–15.00%
Term
5-7 yr
Loan Size
$5M – $200M+
Best For
Operating-business growth + acquisition financing
Recap / Sponsor Mezzanine12.00–16.00%
Term
3-5 yr
Loan Size
$5M – $100M
Best For
Refinance + cash-out to sponsor
Construction Mezzanine13.00–17.00%
Term
24-48 mo IO
Loan Size
$10M – $150M
Best For
Behind senior construction at 65-80% LTC
Hotel Mezzanine (post-PIP)11.50–15.00%
Term
3-5 yr
Loan Size
$5M – $50M
Best For
Behind senior CMBS hotel post-stabilization
Multifamily Mezzanine10.00–13.00%
Term
5-10 yr
Loan Size
$5M – $50M
Best For
Behind senior agency multifamily
Industrial Mezzanine10.50–13.50%
Term
5-7 yr
Loan Size
$5M – $50M
Best For
Behind senior CMBS industrial / bank

Rates indicative as of May 1, 2026 across institutional credit funds, insurance debt platforms, and family-office mezz capital. Effective all-in cost = cash coupon + PIK accrual. Typical PIK 2-4%; cash coupon 8-13%. Warrants or kickers in some structures. Real estate mezz attachment 70-80% LTV, detachment 80-85% LTV behind senior debt.

What Changed This Month (May 2026 vs May 2026)

Mezz spreads compressed 25-75 bps across most asset classes — institutional credit funds returned to active deployment after Q1 risk-off. Real estate mezz tightened most; construction mezz still widest.
SOFR + spread mechanics — SOFR fell ~25 bps from March; floating mezz priced as SOFR + 600-900 bps depending on senior structure + asset class.
PIK ratios stable at 20-30% — cash-pay component remained 10-12%, PIK 2-4%. Some construction mezz pushed to 50% PIK during heavy lease-up periods.
Hotel mezz spreads widened at the margin as conduits selectively reduced hotel concentration in CMBS pools — incremental mezz risk priced 25-50 bps wider on hotel deals.

Mezzanine Capital Stack Position

Mezzanine sits BETWEEN senior debt + equity in the capital stack. Typical institutional structure on a $50M acquisition:

Senior debt (CMBS / agency / bank): 65-70% LTV → $32.5M-$35M at 5.85-6.85%
Mezzanine debt: 70-80% LTV gap → $5M-$7.5M at 10.50-14.50%
Sponsor / LP equity: 20-30% → $10M-$15M (target IRR 18-25%)

When Mezz Wins vs Preferred Equity

Mezzanine wins on: tighter pricing (10-15% vs pref equity 12-18%), clearer lender remedies (foreclosure on equity pledge), tax-deductibility of cash coupon, easier intercreditor with CMBS senior. Preferred equity wins on: no intercreditor required, no foreclosure-on-equity-pledge concerns, more upside for the capital provider via promote splits, easier on senior-CMBS pool composition (counts as equity not debt).

Where to Go Next

Full mezzanine financing details at Mezzanine Financing. Senior CMBS rates at Today's CMBS Rates. Bridge rates at Today's Bridge Rates. Compare across all rate hubs at Commercial Lending Rates Hub.

Frequently Asked Questions — Current Mezzanine Rates

What are current mezzanine loan rates (May 2026)?+

As of May 1, 2026, mezz rates by type: real estate 10.50–14.50%, corporate 11.00–15.00%, recap/sponsor 12.00–16.00%, construction 13.00–17.00%. Effective all-in cost = cash coupon + PIK accrual + sometimes warrants. Typical structure: 70-80% cash pay + 20-30% PIK.

What's the typical mezzanine loan structure?+

Standard real estate mezz: 10-12% cash coupon + 2-4% PIK + sometimes warrants. Subordinate to senior debt via intercreditor. Attachment 70-80% LTV, detachment 80-85% LTV. Term 3-7 years. Prepayment lockout 24-36 months.

When does mezzanine financing make sense?+

Three core use cases: (1) acquisition gap-fill — mezz fills 5-15% of capital stack, (2) recapitalization — refinance senior + cash-out via mezz, (3) construction completion — fill 65-80% LTC gap behind senior construction. Mezz delevers equity returns at 14-18% IRR vs. equity 25-35%.

What's the difference between mezzanine and preferred equity?+

Mezz is DEBT — loan documents, intercreditor with senior, mortgage on equity (pledge of LP/membership interests), default mechanics. Pref equity is EQUITY — stated preferred return, no foreclosure (only equity remedies), no intercreditor. Mezz prices tighter; pref equity has more upside via promote splits.

What's the typical mezzanine loan size?+

Real estate mezz $2M-$50M (institutional credit funds), $500K-$2M (smaller specialty operators). Corporate mezz $5M-$200M. Sweet spot for institutional mezz funds: $5M-$25M deals behind CMBS or agency senior.

How is mezzanine PIK structured?+

PIK = Payment-In-Kind. Unpaid interest accrues to principal and compounds. Typical: 10-12% cash coupon paid monthly + 2-4% PIK accruing. PIK relieves cash-flow pressure during stabilization but increases payoff balance at exit. $5M mezz at 11% cash + 3% PIK over 5 years compounds to ~$5.85M payoff.

Are mezzanine rates going down in 2026?+

Real estate mezz rates compressed 50-150 bps from late 2025 to May 2026 as institutional credit funds returned to deployment. SOFR fell ~25 bps and spreads tightened 25-75 bps depending on deal type. Construction mezz spreads remain widest given timing risk.

Who are the active mezzanine lenders in May 2026?+

Active mezz capital: institutional credit funds (real estate debt platforms at private equity firms), insurance company debt platforms, family-office direct mezzanine, REIT-affiliated mezz operators, hedge funds with private credit allocation, public BDCs, and specialized commercial mezz operators.

Can mezzanine debt be combined with CMBS?+

Yes — mezz subordinate to senior CMBS conduit is common. CMBS senior 65-70% LTV + mezz 70-80% LTV combined caps at ~80% LTV. Intercreditor agreement defines mezz lender rights at senior default + cure rights + standstill periods. Pre-clear intercreditor terms before formal CMBS submission.

What's the prepayment penalty on mezzanine?+

Mezz prepayment typically: lockout 12-36 months, then defeasance OR yield maintenance OR step-down. Step-down common: 5-4-3-2-1% of principal years 1-5. Open prepay last 6-12 months of term. Recap mezz has more flexible prepay than acquisition mezz.

Related Rate Hubs & Tools

See Related Rates by Program

PeerSense covers the full commercial capital stack. Rates and structures across our money pages — updated weekly.

SBA 7(a) & 504

5.50–11.75%

Up to $5M acquisition / real estate / equipment, 10% down

See current rates

CMBS Conduit

5.60–7.10%

10-yr non-recourse fixed, $5M–$500M+, fully assumable

See current rates

Bridge Loans

9.00–14.00%

12–36 mo transitional, SOFR + 470-970 bps, 65-75% LTV

See current rates

DSCR Investor

5.95–8.50%

30-yr fixed rental, qualifies on property cash flow

See current rates

Equipment Financing

5.50–12.00%

Loan, lease, SBA 504, vendor, captive — Section 179 eligible

See current rates

Hotel Financing

5.85–11.75%

CMBS + SBA 504 + bridge + PIP across all flags

See current rates

Mezzanine Debt

11.00–18.00%

Subordinate to senior, $1M–$50M, capital stack fill

See current rates

Private Credit

7.80–18.00%

Non-bank flexibility, unitranche, recap, transitional

See current rates

Invoice Factoring + ABL

0.5–3.5% / 30d

B2B receivables, trucking / staffing / construction / govt

See current rates

Editorial integrity: Rates compiled by PeerSense Capital Advisory. PeerSense is a capital advisory firm, not a lender. Content is for educational purposes only. Rates and structures reflect approximate May 1, 2026 market conditions and may not reflect conditions at time of reading. Mezz pricing varies by senior capital structure, sponsor strength, asset class, leverage, and intercreditor terms. Consult an active mezz lender for transaction-specific quotes.