Mezzanine Financing Market Gets Crowded.

New York -- The commercial real estate mezzanine financing niche may be getting crowded with opportunistic investors and it is likely that some players will be forced out of the field when times get tougher, according to some lenders at a recent Realshare structured finance conference here.

At a "mezzanine market update" panel session, lenders said that the terms that come to mind about the current mezzanine market include "frenetic," "mature," "disciplined" and "mixed bag."

To Arthur Fefferman, president, AFC Realty Capital, the word "frenetic" is what best describes the current supply of mezzanine capital for real estate financing, with real estate becoming a dominant performer and competing with the lackluster performance of the debt and equity markets.

Peter Ginsberg, managing director, Capital Trust, said that in one sign of the growth of the real estate mezzanine market, which has now "matured," no one even knew what it was seven or eight years ago and now no deal even gets done without it.

Scott Schaeffer, president and COO, RAIT Investment Trust, sees more "discipline" as the market gets more and more competitive, with debt service coverage ratios getting pushed to new levels.

Dennis Walsh, senior director, Tremont Realty Capital, sees a "mixed bag," with a lot of funding choices out there and a lot of people who are doing different things marketing themselves as mezzanine lenders.

Richard Kelley, director, Realshare conference series, who moderated the session, wondered if there are too many players in the market.