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Real Estate/Development

Dec. 30, 2003

Mezzanine Debt vs. Defeasance Who's On First?

BY WILLIAM J. BERNFELD AND MICHAEL SCHWARTZ During a period of historically low interest rates, borrowers face a dilemma: Should they refinance their property and pay a hefty defeasance charge or obtain mezzanine financing to meet their equity needs?

BY WILLIAM J. BERNFELD AND MICHAEL SCHWARTZ

        During a period of historically low interest rates, borrowers face a dilemma: Should they refinance their property and pay a hefty defeasance charge or obtain mezzanine financing to meet their equity needs?

        Both conduit financing and mezzanine financing are outgrowths of the economic downturn of the early 1990s. Instit...

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