Short answer
Stabilized mezz is usually fixed-rate, fully current-pay, and matched to a 5 to 10 year senior. Transitional mezz is floating, partially accrued, and 2 to 5 year.
What is the underwriting difference?
Stabilized mezz is sized to in-place trailing-twelve NOI with a debt-yield floor. Transitional mezz uses as-stabilized projections, with milestones (lease-up, capital expenditure completion) baked into the cash-management waterfall and into extension tests.
Where does the structural risk live?
On stabilized deals, refinance and rate-reset risk at maturity. On transitional deals, plan-execution risk during the hold period. Sponsors should choose whichever risk profile they can credibly underwrite, the wrong choice usually surfaces at the first extension test.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11