Mezzanine Debt & Preferred Equity

Proprietary Direct Capital Investments

Construction AND Value-AdD Assets

Alcove Funding is a regional investor of proprietary capital for mezzanine debt and preferred equity investments. This program is designed to provide middle market developers and owners with mezzanine debt or preferred equity for ground up construction and value-add projects.  Capital structures are tailored to the needs of our clients and first lien lenders through either a pledge of ownership interest or a structured equity partnership.

Mezz/Pref Equity Parameters

Eligible Properties Multifamily, Retail, Office, Industrial, Assisted Living, Self-Storage and select Condo Projects
Geography The greater Chicagoland area (including Indianapolis, IN to Milwaukee, WI)
Target Size Investments at $750,000 to $5,000,000
Maximum Leverage 90% LTC or 80% of stabilized LTV (subject to stabilized take-out and debt yield requirements)
Term Co-terminus with 1st lien lender
Amortization Interest Only
Interest Rate Risk based pricing starting at ~12% (accrued interest structures available)
Organization Fee Minimum of 2%
Recourse Typically non-recourse with standard carve-outs

Client Benefits

Lower cost of capital

Save time and energy raising money

Protect upside

Achieve unique capital structure requests

Be more competitive on smaller transactions

Increase efficiency with “One-Stop Shop” for up to 90% of capital