• Senior Debt – At the very bottom of the capital stack is senior debt. Senior debt usually makes up 50-70% of the capital stack. Senior debt can include fixed rate loans, floating rate loans, construction loans, bridge loans and hard money loans.

• Mezzanine Debt – In the middle of the capital stack is mezzanine debt. Mezzanine debt is subordinate to senior debt, so the risk is higher to the lender. Mezzanine debt is typically used to add additional leverage beyond the 50-70% provided by the senior debt. Adding an equity component to the mezzanine debt results in a participating loan or hybrid mezzanine loan.

• Equity Financing – At the top of the capital stack is equity financing. Equity is different from debt in that the investor participates in the success of the project being financed for a set period of time. Equity capital can include preferred equity, joint venture equity and/or sponsor equity

As a commercial loan broker, your clients count on you to help them secure the financing they need from options across the capital stack.

An interesting and often little-known function of hard money is that it isn’t exclusive to real estate; hard money can also be used to secure financing on other assets such as minerals and gemstones.

If you’re not sure if hard money is right for your clients’ projects you can call or email me, or ask a question below.

Jones Lang LaSalle Hotels, which tracks asset sales $10 million and higher, reports more than $1.1 billion of hotel sales in the United States in September alone. To put that figure in perspective, consider there was only $2.2 billion transacted in all of 2009. Given that the velocity of transactions is accelerating, Jones Lang LaSalle Hotels has boosted its 2010 forecast from the just surpassed $4.5 billion to $6.5 billion.

The buying opportunity of a lifetime many expected has not arrived, but several recent trophy assets acquired in major markets for top dollar indicate the paralysis of the past 18 months is over. A schizophrenic climate has developed, though, as many distressed assets haven’t come to market and some stabilized properties in secondary locations have drawn little interest from buyers.

Respondents expect well financed lenders, such as insurance companies, to be able to negotiate good rates. They also expect well-capitalized borrowers, such as real estate investment trusts, to be among the top buyers.

About $1.4 trillion of mortgages on U.S. commercial real estate — including apartment buildings, hotels, office buildings, distribution centers, malls and shopping centers — are expected to mature between now and 2014, according to Trepp, a real estate loan data provider. Those borrowers will have to find new loans to replace the maturing ones and they will likely face less generous lenders.

That means the cash will have to come from other investors, higher cash flows from properties, or out of the borrower’s pocket. If not, those borrowers could face foreclosures from lenders willing to face the write downs on their loans.

The $57 billion figure is but a fraction of the rate the industry was pacing from 2006 to 2008. And while Preqin notes that the industry is still facing serious challenges, it expects funds to see improvements in the fourth quarter and into next year. Fundraising should rise slightly – 10% to 20% – in the fourth quarter and into the foreseeable future.

Public and private REITs have landed the largest deals of late, but private equity, pension funds, insurance companies, owner-developers and even private individuals are all getting into the action for both core and distressed multifamily projects in large metros around the country, according to CoStar Group sales data.

In response, many economists lowered their growth expectations for the domestic economy. Commercial real estate markets were therefore caught in a “downdraft” that is reflected in the “relatively large” declines in the index over the past two months.

Public and private REITs have landed the largest deals of late, but private equity, pension funds, insurance companies, owner-developers and even private individuals are all getting into the action for both core and distressed multifamily projects in large metros around the country, according to CoStar Group sales data.