Loan-to-cost is the percentage of a project’s total development or acquisition cost that is being financed with borrowed money, calculated by dividing the loan amount by the full cost of the project. It matters to investors because it signals how much equity the sponsor has at stake—like how much of a house you own versus what’s mortgaged—and higher ratios mean more leverage, higher potential returns, but also greater risk if costs rise or revenue falls.
yield maintenancefinancial
A yield maintenance is a prepayment fee built into a loan or bond that compensates the lender or investor when a borrower pays off the debt early; it’s designed to make the lender whole by replacing the interest they would have received if the loan stayed outstanding. For investors this matters because it affects expected cash flow, pricing and resale value—think of it like a cancellation fee that preserves the income stream an investor counted on.
mezzanine financingfinancial
Mezzanine financing is a hybrid form of capital that sits between a company’s senior loan and its ownership, typically structured as a subordinated loan or convertible instrument that pays higher interest and may include rights to convert into equity. Think of it like a second mortgage or a booster seat: it carries more risk than the main loan but is less permanent than selling shares. It matters to investors because it can boost returns for lenders, increase a company’s debt burden, and potentially dilute equity if converted, influencing risk and reward.
preferred equityfinancial
Preferred equity is a type of investment that sits between common stock and debt in a company's financial structure. It typically offers investors priority in receiving dividends and getting their money back if the company runs into trouble, making it somewhat safer than regular shares. Investors value preferred equity because it provides a steady income stream while still allowing some participation in the company's success.
joint venture equityfinancial
Joint venture equity is the ownership stake a company or investor holds in a business formed and run together with one or more partners. Think of several neighbors pooling money to buy and manage a rental property: each owner’s share determines their share of profits, losses, decision-making influence and liability. For investors, joint venture equity matters because it affects future cash flow, balance-sheet exposure and how much control and risk come from a shared enterprise.
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IPA Capital Markets, a division of Marcus & Millichap (NYSE:MMI) specializing in capital markets services for major private and institutional clients, has arranged $116,525,065 in financing for the development of a 1.4 million-square-foot industrial property in the Pacific Northwest.
Gary Mozer, IPA Capital Markets executive managing director, and Lee Norman, senior managing director, both in the firm’s Los Angeles office, secured the financing on behalf of a national real estate development and investment firm specializing in the acquisition, development and management of commercial real estate.
“The credit nature of the tenant allowed us to secure 95% loan-to-cost financing at a five-year fixed rate of 5.28%,” said Mozer. “The loan includes yield maintenance prepayment terms, with the final six months open with no prepayment penalty.”
About IPA Capital Markets
IPA Capital Markets is a division of Marcus & Millichap (NYSE: MMI). IPA Capital Markets provides major private and institutional clients with commercial real estate capital markets financing solutions, including debt, mezzanine financing, preferred and joint venture equity, and sponsor equity. For more information, please visit institutionalpropertyadvisors.com/capital-markets.
Marcus & Millichap, Inc. is a leading brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services with offices throughout the United States and Canada. Marcus & Millichap closed 8,818 transactions with a sales volume of $50.8 billion in 2025. The company had 1,808 investment sales and financing professionals in more than 80 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate at year end. For additional information, please visit www.MarcusMillichap.com.
