Last month Cassidy & Pinkard Colliers’ capital markets group here closed for Republic Properties Corp. a $212 million senior-and-mezz loan package to refinance debt that company had on a 505,631-sf office building in Washington, DC. A West Coast commercial bank provided the senior loan and the mezz piece was provided by a national pension fund advisor. David Webb, senior managing director at C&P, along with colleagues John Campanella and Jamie Butler, structured the two-tiered debt transaction. The deal was significant in that it provided a well-needed boost of confidence that financing can still be found. It was also illustrative of a growing trend – namely that deals are closing with a heavier component of mezz lending. It may not have been ideal, at least compared to earlier markets, “but it was the best pricing and structure available on the current market,” Webb tells Why all the interest in mezzanine debt by investors and lenders now?

Webb: A lot of the old equity investors have shifted to mezzanine because the returns are pretty good – 18% — and it is still not as high up in the capital stack.

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