3 Creative Capital Stack Structures Keeping Deals Alive in 2025
3 Creative Capital Stack Structures Keeping Deals Alive in 2025
Rates are high. Lenders are cautious. Yet good sponsors are still closing — by engineering smarter capital stacks, not waiting for rates to fall.
Here are 3 structures we’re seeing work right now 👇
1️⃣ Senior + Mezzanine Layer
When banks stop at 65–70% LTC, adding a mezzanine layer pushes leverage up to ~85%.
It’s structured debt — not equity — letting sponsors close gaps without dilution.
2️⃣ Preferred Equity Replacing Mezz
With mezz pricing tightening, many sponsors are pivoting to preferred equity — same position in the stack, but with more flexible terms and upside participation.
Often used when senior lenders won’t allow a true mezz note.
3️⃣ Bridge with a Construction Tail
Bridge lenders are extending into stabilization periods, giving developers time to lease up or season cash flow before refinancing into perm debt.
That flexibility can make or break timelines right now.
🧩 Why this matters:
Capital creativity is the difference between paused and closed deals.
The capital stack isn’t fixed — it’s engineered.
💬 Question for the group:
What’s the most creative capital stack you’ve closed (or seen) in this market?
#RealEstateInvesting #CapitalStack #CREFinance #PreferredEquity #MezzanineDebt #BridgeLoans #DealStructure #CommercialRealEstate #DevelopmentFinance #BiggerPockets
Most Popular Reply
@John Zinno if there is mezz debt in a deal you do not want to be a LP. The terms are very onerous and any default will wipe out LP's even if there was still equity
- Chris Seveney
