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One underwrites the debt and the other one underwrites the equity part
So say for instance on an acquisition model you have Investment cash flows for the capital stack, operating cash flows, and reversion cash flows. Given that, how would it be structured for a Mezzanine lender?
Property-level modeling is identical - as mezz debt you are still pretty concerned with the business plan and more granular details than a senior lender. You're not going to get exposure to the same operational know-how as the equity side re: strategy and asset management, but financially speaking its the same. You just care more about your debt metrics while they care more about equity returns.
The modeling/underwriting difference between debt/equity is really just seen as a senior lender where you don't give a shit beyond property-level cash flow before debt service as long as your coverage ratio and debt yield are kosher.
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