Mezzanine Financing & Preferred Equity
Flexible gap capital positioned between senior debt and sponsor equity to unlock higher leverage.
As part of Trusted Income Fund's broader real estate debt platform, this structured mezzanine and preferred equity capital sits behind the first-lien mortgage note and ahead of sponsor equity, allowing developers, sponsors, and brokers to achieve higher leverage on commercial real estate transactions without diluting ownership. Institutional investors gain access to a disciplined, subordinate capital position within a well-underwritten debt structure.
How Mezzanine Debt and Preferred Equity Are Structured
Trusted Income Fund structures mezzanine debt and preferred equity to help sponsors, developers, and institutional borrowers achieve higher leverage on commercial real estate transactions without surrendering full control of the asset. Brokers and financial institutions rely on this layer of capital to complete transactions that conventional senior-only financing cannot fully fund.
Capital Stack Positioning
Mezzanine debt and preferred equity are positioned between the senior lender's first-lien mortgage and the sponsor's common equity, subordinate to senior debt but ahead of common equity in priority of repayment.
Higher Leverage Without Full Dilution
Sponsors can extend total leverage beyond conventional senior loan-to-value limits while preserving a meaningful ownership position, avoiding the dilution associated with raising additional common equity.
Flexible Structuring
Capital is deployed as a fixed coupon, an accruing preferred return, or a hybrid structure combining current pay with back-end participation, tailored to the sponsor's cash flow profile and hold period.
Use Cases Across the Capital Stack
Commonly deployed to fund value-add acquisitions, recapitalize existing ownership structures, and bridge the equity gap on ground-up development where senior lenders will not extend further proceeds.
For sponsors seeking near-term capital deployment on transitional assets, Trusted Income Fund also offers Bridge & Transitional Lending programs. Estimated returns of 20% on short-term loans. Learn more
The Capital Stack
Senior Secured Debt
First-lien position, lowest cost of capital
Mezzanine Debt & Preferred Equity
Subordinate to senior debt, ahead of common equity
Sponsor Common Equity
First-loss position, highest target return
Ready to Structure Your Capital Stack?
Speak with our capital solutions team about mezzanine and preferred equity financing for your next commercial real estate acquisition, recapitalization, or value-add project. Trusted Income Fund structures flexible gap capital for sponsors, developers, and institutional borrowers seeking higher leverage without ceding control of their asset.