Capital Structure
Senior Debt
How institutional CRE senior debt actually prices and sizes — bank covenants, bridge rate caps, CMBS prepayment, construction draws, and HUD 221(d)(4) construction-to-perm.
Senior debt is the largest single line item in the institutional capital stack and the one that most often decides whether a deal pencils. The mechanics differ sharply by lender channel: a regional bank prices recourse, covenants, and personal guaranties; a debt fund prices SOFR plus a spread with rate caps and a strict exit; a CMBS conduit prices lockout, yield maintenance, and defeasance; HUD prices a four-test loan-sizing constraint and a fixed-rate construction-to-permanent execution. Each channel has its own underwriting logic and its own prepayment regime, and the 2026 market — with $1.4 trillion of maturing CRE debt and a tighter regional-bank posture — has reset where each channel actually clears.
These five articles walk the institutional senior-debt channels one by one. Start with bank debt if you are negotiating recourse and covenants. Start with bridge loans if you are sizing a value-add execution with a rate cap. Start with CMBS if you are evaluating a prepayment or hold-to-maturity decision. Start with construction or HUD if you are sizing a ground-up. Each piece carries the formula, a worked 2026 example, and the named-lender market data behind the benchmark.
5 articles
-
Bank Debt: Recourse vs Nonrecourse, Bad-Boy Carveouts, and Loan Covenants
The recourse-vs-nonrecourse spread (25–75 bps partial / 75–150 bps full nonrecourse premium), the bad-boy carveout taxonomy (loss-only vs springing recourse), burn-off provisions, covenant breach as a separate event of default, and the 2025–2026 regional-bank pullback that has tightened recourse on small-balance bank loans.
Read article → -
Bridge Loans: Floating-Rate Risk, Rate Caps, and the 2026 Exit Assumption
How institutional CRE bridge loans price in 2026 — SOFR spreads by sponsor tier, the rate-cap economics that 2021-vintage sponsors discovered the hard way, the four-exit waterfall, and the refinance gap on $1.4 trillion of maturing CRE debt. The all-in coupon math that isn't on the rate sheet.
Read article → -
CMBS Prepayment: Conduit vs SASB, Yield Maintenance, and Defeasance — A Practitioner's Guide
The structural differences between conduit and SASB CMBS, the prepayment lockout window, the yield-maintenance formula, the defeasance portfolio construction, and the 2026 maturity wave that's resurfacing negative-defeasance for the first time since 2006 — with the math defeasance consultants gate behind their email forms.
Read article → -
Construction Loans: Draw Schedules and Interest Reserves — A Practitioner's Guide
How institutional construction loans are sized, drawn, and reserved against — with the S-curve math, the interest-reserve formula that competitors get wrong, a worked $50M ground-up multifamily example, and the 2026 rate-environment overlay.
Read article → -
HUD/FHA 221(d)(4): The Construction-to-Permanent Workhorse for Institutional Multifamily
How HUD 221(d)(4) construction-to-permanent loans work for institutional multifamily — the four-test loan-sizing constraint, BSPRA equity credit, MIP schedule, Davis-Bacon wages, cost certification, and the C2P transition mechanics most competitors don't model.
Read article →