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 to 12% cash coupon + 2 to 4% PIK + sometimes warrants or kicker. Subordinate to senior debt (CMBS conduit, agency, bank) via intercreditor agreement. Attachment point 70 to 80% LTV, detachment point 80 to 85% LTV. Term typically 3 to 7 years. Prepayment lockout 24 to 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 to 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 to 80% LTC gap. Math: mezzanine returns 14 to 18% IRR for the lender vs. 25 to 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 to 15% vs pref equity 12 to 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 on this desk is $10 million and up, behind senior CMBS or agency. Files below $10 million are a pass.

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 to 12% cash coupon paid monthly + 2 to 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 to 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 to 75 bps depending on deal type. Construction mezz spreads remain widest given timing risk. Forward curves suggest further 25 to 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 to 70% LTV + mezz at 70 to 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 to 36 months (no prepay), then defeasance OR yield maintenance OR step down. Step down structures common: 5 4 3 2 to 1% of principal in years 1 to 5. Yield maintenance pays present value of remaining interest. Open prepay last 6 to 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 to 14.50%, corporate mezzanine 11.00 to 15.00%, recap/sponsor mezzanine 12.00 to 16.00%, construction mezzanine 13.00 to 17.00%. Effective all in cost = cash coupon + PIK accrual (+ sometimes warrants). Typical structure: 70 to 80% cash pay + 20 to 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 to 14.50%	3-7 yr	$10 million and up	Behind senior CMBS / agency on stabilized assets
Corporate Mezzanine	11.00 to 15.00%	5-7 yr	$10M to $200M+	Operating business growth + acquisition financing
Recap / Sponsor Mezzanine	12.00 to 16.00%	3-5 yr	$10 million and up	Refinance + cash out to sponsor
Construction Mezzanine	13.00 to 17.00%	24 to 48 mo IO	$10M to $150M	Behind senior construction at 65 to 80% LTC
Hotel Mezzanine (post PIP)	11.50 to 15.00%	3-5 yr	$10 million and up	Behind senior CMBS hotel post stabilization
Multifamily Mezzanine	10.00 to 13.00%	5-10 yr	$10 million and up	Behind senior agency multifamily
Industrial Mezzanine	10.50 to 13.50%	5-7 yr	$10 million and up	Behind senior CMBS industrial / bank

Real Estate Mezz (stabilized)10.50 to 14.50%
Term
3-7 yr
Loan Size
$10 million and up
Best For
Behind senior CMBS / agency on stabilized assets
Corporate Mezzanine11.00 to 15.00%
Term
5-7 yr
Loan Size
$10M to $200M+
Best For
Operating business growth + acquisition financing
Recap / Sponsor Mezzanine12.00 to 16.00%
Term
3-5 yr
Loan Size
$10 million and up
Best For
Refinance + cash out to sponsor
Construction Mezzanine13.00 to 17.00%
Term
24 to 48 mo IO
Loan Size
$10M to $150M
Best For
Behind senior construction at 65 to 80% LTC
Hotel Mezzanine (post PIP)11.50 to 15.00%
Term
3-5 yr
Loan Size
$10 million and up
Best For
Behind senior CMBS hotel post stabilization
Multifamily Mezzanine10.00 to 13.00%
Term
5-10 yr
Loan Size
$10 million and up
Best For
Behind senior agency multifamily
Industrial Mezzanine10.50 to 13.50%
Term
5-7 yr
Loan Size
$10 million and up
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 to 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 to 900 bps depending on senior structure + asset class.
PIK ratios stable at 20 to 30%, cash pay component remained 10 to 12%, PIK 2 to 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 to 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 to 70% LTV → $32.5M to $35M at 5.85 to 6.85%
Mezzanine debt: 70 to 80% LTV gap → $5M to $7.5M at 10.50 to 14.50%
Sponsor / LP equity: 20 to 30% → $10M to $15M (target IRR 18 to 25%)

When Mezz Wins vs Preferred Equity

Mezzanine wins on: tighter pricing (10 to 15% vs pref equity 12 to 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.

Current Mezzanine Rates Frequently Asked Questions

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

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

What's the typical mezzanine loan structure?+

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

When does mezzanine financing make sense?+

Three core use cases: (1) acquisition gap fill, mezz fills 5 to 15% of capital stack, (2) recapitalization, refinance senior + cash out via mezz, (3) construction completion, fill 65 to 80% LTC gap behind senior construction. Mezz delevers equity returns at 14 to 18% IRR vs. equity 25 to 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 mezzanine on this desk is $10 million and up.

How is mezzanine PIK structured?+

PIK = Payment In Kind. Unpaid interest accrues to principal and compounds. Typical: 10 to 12% cash coupon paid monthly + 2 to 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 to 150 bps from late 2025 to May 2026 as institutional credit funds returned to deployment. SOFR fell ~25 bps and spreads tightened 25 to 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 to 70% LTV + mezz 70 to 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 to 36 months, then defeasance OR yield maintenance OR step down. Step down common: 5 4 3 2 to 1% of principal years 1 to 5. Open prepay last 6 to 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. These are indicative levels direct capital sources have been pricing across these programs as of October 1, 2026.

Originator warehouse

$100M a month

Focus $100 million a month. Will look at $10 million a month. $10 million is not the focus.

See current rates

Invoice Factoring

0.5 to 3.5% / 30d

B2B invoices from $20 million a month. Advance 80 to 95 percent of face.

See current rates

CMBS Conduit

5.60 to 7.10%

10 year Non Recourse fixed, $10 million and up, fully assumable

See current rates

Bridge Loans

9.00 to 14.00%

$10 million and up. Cash in about 35 percent. Name the takeout first.

See current rates

Data Center

CRS to 89%

$1 billion to $30 billion plus. Signed or guaranteed hyperscaler lease.

See current rates

Contracted revenue sale

Up to 89%

15 year lease signed or guaranteed by a hyperscaler. Size follows the lease.

See current rates

Hotel Financing

Hotel financing is search only for $10 million and up, with cash in about 35 percent.

See current rates

Private Credit

7.80 to 18.00%

Non bank flexibility for commercial real estate at $10 million and up.

See current rates

SBA 7(a) & 504

Search path. Not a growth lane on this desk.

See current rates

Indicative only, as of October 1, 2026. Not a quote, commitment or offer of credit. Final pricing, leverage and terms are determined by the lender at underwriting, after full transaction materials are reviewed. PeerSense sources the file. The lender sets pricing. What these terms mean.

Editorial integrity: Rates compiled by PeerSense Capital Advisory. PeerSense sources capital through a curated network of commercial lenders and capital sources. 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.