- Mezzanine Financing Request for PIP
- $20,000,000 Mezzanine Loan
- 7.25% Fixed Rate on 25-year amortization
The client, a publicly traded REIT, approached RPC with a need to obtain capital for an upcoming Property Improvement Plan (PIP) of their 549-room Hilton Hotel that was far in excess of the amount of money that the first mortgage lender had reserved. RPC was able to identify a lender willing to fund the PIP money with $20,000,000 in mezzanine financing which was underwritten at 51% loan-to-value and featured a term coterminous with the senior loan in 2024. The loan had a fixed interest rate of 7.25% on a 25-year amortization. Perhaps even more importantly, RPC was able to navigate through the red tape of placing a mezzanine loan behind an existing CMBS loan. The servicer approved the loan even though it did not fully fund the required PIP.