Education
Plain-language explanations of commercial real estate financing terms and concepts.
A short-term loan (typically 6-36 months) used to "bridge" the gap between acquiring or repositioning a property and securing permanent financing.
A subordinate loan that sits between senior debt and equity in the capital stack, typically carrying higher interest rates in exchange for filling the financing gap.
An equity investment that receives a priority return before common equity holders, sitting between mezzanine debt and common equity in the capital stack.
The first mortgage or primary loan on a property, holding the highest priority claim on cash flow and sale proceeds in the capital stack.
Any debt that ranks below senior debt in repayment priority, including mezzanine loans and B-notes, carrying higher interest rates to compensate for greater risk.
A loan where the borrower pays only interest during the loan term (no principal reduction), resulting in lower monthly payments but a full principal balance due at maturity.
The duration and structural features of a bridge loan, including term length, extension options, interest rate structure, prepayment provisions, and reserve requirements.
The subordinate tranche of a whole loan or CMBS securitization, carrying higher risk and higher yield than the senior (A-note) portion.
An asset-based, short-term loan from a private lender, with faster closing and looser qualification requirements but higher interest rates than conventional financing.
Long-term financing (5-30 years) for stabilized commercial properties, replacing bridge or construction loans with lower rates and amortizing payment structures.
The layered structure of all capital sources used to finance a real estate investment, arranged from lowest risk (senior debt) to highest risk (common equity).
Capital provided by a co-general partner alongside the lead sponsor, sharing in GP-level economics, responsibilities, and decision-making authority.
Capital provided to fund earnest money deposits during the due diligence period, allowing sponsors to control deals with less personal capital at risk.
A loan where the borrower has stopped making payments (typically 90+ days delinquent), representing both a distressed situation and a potential investment opportunity.
The process of restructuring a property's capital stack — replacing existing debt or equity partners — to improve terms, return capital to investors, or bring in new capital.
An investment strategy focused on acquiring underperforming properties, improving them through renovations or better management, and increasing income and value.
The process of constructing a new commercial building from the ground up, involving land acquisition, entitlements, construction, and lease-up or sale.
The major property categories in CRE — multifamily, office, retail, industrial, and hospitality — each with distinct risk profiles, income characteristics, and market dynamics.
Investing in residential rental properties with 5+ units, offering diversified income streams, favorable financing options, and strong demand fundamentals.
The ratio of a loan amount to the appraised value of the property, used by lenders to assess risk. Lower LTV means less risk for the lender.
A metric that measures a property's net operating income relative to its total debt obligations, indicating the property's ability to service its debt.
The ratio of net operating income to property value, used to estimate the return on a real estate investment and compare properties.
Total property revenue minus operating expenses (excluding debt service and capital expenditures), representing the income a property generates from operations.
The comprehensive investigation of a property before acquisition — including financial analysis, physical inspection, legal review, and market research — to verify assumptions and identify risks.
The individual or company that sources, structures, manages, and operates a commercial real estate investment, also known as the general partner (GP) or operator.
Explore markets where we lend and invest, side-by-side financing comparisons, and the bridge lending platform.
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