Mezzanine finance for property projects
Lucrative projects in Germany often fail not on the senior loan, but on the equity gap above it. Mezzanine capital closes exactly that gap and is in part counted by banks as economic equity. I explain the component clearly, structure your overall financing — and tie the subordinated part in via licensed partners.
In short
What is mezzanine capital — and what does it achieve?
Subordinated capital between the first-ranking senior loan and true equity. Because it is clearly subordinated — participating loans, subordinated loans, silent partnerships, profit-participation rights — banks count it in part as economic equity. It carries more risk than the bank loan and therefore costs more; its value is the leverage that makes a project possible when your own equity is not enough.
Who arranges this?
Perini Finance & Property — licensed under §34c GewO for commercial property loans, 650+ banks & capital providers, we know the houses whose lending rules cover the senior loan side of your project, brokered by Perini. Mezzanine and equity-like components are asset investments requiring §34f GewO or KWG authorisation — these are not brokered by Perini but tied in via appropriately licensed partners, so you get the complete structure coordinated from a single source.
When does mezzanine pay off?
When the additional leverage creates more value than it costs: a project becomes possible at all, an opportunity is secured, tied-up equity is freed for a further project. It does not pay off when it merely papers over a shaky calculation.
What is mezzanine capital needed for in a development finance structure?
For the gap between the senior loan and the equity. Banks and debt funds fund German development projects at an average of 66.3 percent of total costs, as measured by the BF quarterly barometer for the second quarter of 2026. Roughly a third therefore has to come from own funds or from a subordinated tranche.
That is where mezzanine sits: ranked behind the bank, secured subordinately, carrying the higher risk. It costs considerably more than the senior tranche for exactly that reason. For a bank to treat the tranche as economic equity, it has to be clearly subordinated.
Common forms are a subordinated loan, a profit-participating loan, a silent partnership or a participation right. The split of roles is firm: the senior debt side is brokered under section 34c GewO, the subordinated part through licensed partners. Without own funds, mezzanine will not carry a project either.
What mezzanine capital is — and what it achieves
Mezzanine sits in the capital structure between the first-ranking senior loan and true equity. It is subordinated in its security, so it carries more risk than the bank — and therefore costs more. Its value lies in the leverage: a small subordinated component can make a project possible for which your own equity would otherwise not be enough.
The structuring is decisive. For a bank to recognise the component as economic equity, it must be clearly subordinated. In practice these are instruments such as participating loans, subordinated loans, typical or atypical silent partnerships, or profit-participation rights.
Who may broker which component — and my clear line
Precision is mandatory here, because the components are regulated differently:
| Component | Character | Who brokers |
|---|---|---|
| Senior loan / bridge | first-ranking loan | Perini, under §34c GewO |
| Subordinated / participating loan | asset investment, subordinated | licensed partners (§34f GewO) |
| Silent partnership / profit-participation right | asset investment | licensed partners (§34f GewO) |
| Equity / joint venture | entrepreneurial participation | licensed partners |
When mezzanine pays off — and when not
Mezzanine is expensive. It pays off when the additional leverage creates more value than it costs: a project becomes possible at all, an opportunity can be secured, tied-up equity is freed for a further project. It does not pay off when it merely papers over a shaky calculation. I calculate this through with you honestly — and say so too when the subordinated component is the wrong answer.
Frequently asked questions
Do you broker mezzanine capital yourself?
Why does a bank count mezzanine as equity?
How much more expensive is mezzanine than a bank loan?
Can you still organise the complete structure for me?
Let’s talk about your capital structure
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