What is the typical loan-to-value (LTV) benchmark for senior loans?

The typical loan-to-value (LTV) benchmark for senior loans is generally in the range of 50-70% of the property value. This metric is crucial as it indicates the percentage of the property’s value that can be financed through a loan. Senior loans are considered to be lower risk compared to subordinate loans due to their priority in the capital structure, and as such, lenders typically feel comfortable lending a larger percentage of the property value within this range.

By maintaining an LTV ratio of 50-70%, lenders ensure that there is enough equity invested in the property to mitigate the risk associated with potential declines in property value or issues with repayment. This conservative approach protects the lender's interests while providing borrowers with access to a substantial portion of financing for their investments. Therefore, this answer is aligned with the standard practices in real estate finance where senior loans are concerned.