As a commercial real estate investor, you may have come across the term A/B notes when exploring financing options for your projects. In this article, we will explain what A/B notes are, how they work, and how GILKO CAPITAL can help you secure this type of financing for your investment.

What are A/B Notes?

A/B notes are a type of financing structure used in commercial real estate investments. The A note represents the senior portion of a mortgage loan, which is typically secured by the property’s cash flow. The B note represents the subordinated portion of the loan, which is typically unsecured and subordinate to the A note.

How do A/B Notes Work?

A/B notes allow lenders to split a loan into two parts, with different interest rates and risk profiles. The A note is typically larger and has a lower interest rate, as it represents the senior portion of the loan and is secured by the property’s cash flow. The B note is smaller and has a higher interest rate, as it represents the subordinated portion of the loan and is typically unsecured.

A/B notes can be attractive to both lenders and investors. Lenders can reduce their risk exposure by splitting the loan into two parts, while investors can benefit from potentially higher returns by investing in the higher-yielding B note.

How Can GILKO CAPITAL Help You Secure A/B Notes?

At GILKO CAPITAL, we specialize in providing financing solutions to commercial real estate investors. Our team of experts have extensive experience in structuring A/B notes to meet our clients’ unique needs. We work closely with our clients to understand their investment goals and help them secure financing that is tailored to their specific needs.

Our financing solutions are designed to provide our clients with the flexibility they need to achieve their investment objectives. Whether you are looking to acquire a new property, refinance an existing one, or fund a new development project, we can help you secure the financing you need to succeed.

Conclusion

A/B notes are a popular financing structure in commercial real estate investments. They allow lenders to reduce their risk exposure and investors to potentially benefit from higher returns. At GILKO CAPITAL, we specialize in providing financing solutions to commercial real estate investors and can help you secure A/B notes that are tailored to your specific needs. Contact us today to learn more about how we can help you achieve your investment goals.