Byline: Jonathan Berke
Although Capital Trust Inc. will announce some time in August that it has raised the largest mezzanine real estate financing fund, it is a record bound to be broken.
Robust demand for such lending exists because it's more difficult for borrowers to get bank financing. In fact, the market for mezzanine funding in real estate could reach between $65 billion and $135 billion, according to Prudential Real Estate Investors.
Mezzanine investments consist primarily of privately issued subordinated debt, which could include a conversion to equity in the form of warrants, preferred stock and equity co-investments.
Real estate companies use this …