Property and land acquisitions
First-ranking finance for investment properties, development land or portfolios, with realistic leverage and an appropriate repayment plan.
Service · Senior loans
Senior Loans: First-Ranking Real Estate Finance
A viable capital structure begins with senior debt. Alternate Capital arranges senior loans for acquisitions, construction and investment properties through banks and institutional lenders, from €750,000 to €180 million across Germany, Austria and Switzerland.
The basics
The features of a senior loan
Senior debt has priority. A senior loan occupies the first rank in the land register and is paid ahead of lower-ranking capital on enforcement. Its lower risk generally makes it the lowest-cost debt component in a property financing structure, providing the benchmark for other tranches such as Mezzanine capital .
Providers include commercial banks, savings banks and Pfandbrief banks, as well as insurers and debt funds. Requirements have tightened since interest rates rose, with more conservative LTVs, stronger presales or pre-letting and reliable Debt servicing capacity. We assess current lender criteria and prepare the application for suitable providers.
- First-ranking: secured against the property and generally the lowest-cost part of the structure.
- Terms: from the construction period to more than 10 years for investment properties.
- Leverage: Indicatively around 55–75%, depending on the property, cash flow and sponsor.
Applications
Applications for senior loans
Project and construction finance
Drawdowns linked to construction progress, potential interest capitalisation during the build and repayment through sale or investment finance, aligned with the programme.
Investment property and portfolio finance
Long-term first-ranking finance for rented assets, including Refinancing of maturing loans with an updated structure.
Terms
What determines senior loan terms?
The interest rate and leverage follow a risk assessment rather than a standard price list. Five factors are particularly important:
- Property and location: asset class, location, alternative-use potential and condition affect mortgage lending value.
- Cash flow: lease terms, tenant creditworthiness and sustainable rent underpin debt servicing capacity.
- Loan-to-value: lower leverage generally supports a better margin, often within defined pricing bands.
- Sponsor: experience, the equity contribution and track record affect the risk assessment and pricing.
- Structure: The fixed-rate period, principal repayments, covenants and security package complete the terms.
Important: We do not quote a universal rate. We obtain actual term sheets so you can compare realistic financing offers.
Capital structure
Combining a senior loan with other funding
Where senior leverage is insufficient, it can form the foundation of a layered capital structure.
Senior plus mezzanine
The conventional combination: the bank provides first-ranking debt and Mezzanine capital addresses the equity gap. Subordination and coordination are required, which we arrange.
A whole loan instead of separate tranches
Where speed matters or coordinating two lenders is too complex, a Whole loans combines both tranches with one provider.
Senior plus bridge
A Bridge loan can cover the period before long-term finance, planning permission, letting or a sale is in place.
Media
Senior loan podcasts and videos
Podcast
Senior loans and property project returns
The effect of first-ranking debt on returns, and the factors affecting leverage and pricing.
Original recording in German.
All episodes in the Podcast hub
Original recording in German.
Frequently asked questions
Senior loans: quick answers
How does a senior loan differ from an ordinary home mortgage?
In structured finance, the term describes the first-ranking tranche of a larger commercial property financing. Assessment focuses on project cash flow, exit and sponsor, rather than primarily on personal income as in consumer mortgage lending.
Can I obtain a senior loan without an existing bank relationship?
Yes. We approach banks and institutional lenders whose criteria fit the project, regardless of whether you already have a relationship with them.
How long does approval take?
Depending on the institution and documents, approximately three to ten weeks. Complete, well-prepared information can reduce assessment time.
What happens when the fixed-rate period ends?
The next step is Refinancing : renewing, refinancing or restructuring, ideally considered 12–18 months before expiry.
Banks and debt funds
A senior loan from a bank or debt fund?
Banks remain an important source of senior loans, but insurers, pension funds and specialist debt funds also provide first-ranking property finance. The most suitable source depends on the project.
Banks often offer the lowest rates because of their funding sources, including deposits and Pfandbriefe. This comes with regulatory requirements, more conservative LTVs and potentially longer approval processes. For stable core assets with sound occupancy and a long holding period, bank finance is often attractive.
Debt funds and institutional lenders may accept higher leverage and transitional situations such as repositioning or vacancies, with faster decisions. Their margins are generally higher. For value-add projects, time-sensitive acquisitions or assets outside standard bank criteria, that flexibility can be valuable. We compare offers by whether the structure supports the project, alongside the nominal rate.
Some projects combine lower-cost senior bank finance with a subordinated debt fund tranche. We coordinate the lenders and intercreditor arrangements before completion so the components work together.
Next step
Enquire about a senior loan for your project
Send the property details, amount and timetable through our initial assessment form. We will assess suitable lenders and structures.
About the author
Jürgen Kronawitter
Jürgen Kronawitter specialises in structured real estate finance. He helps property investors, developers and portfolio owners implement complex financing solutions. His work focuses on structuring and arranging senior loans, whole loans, mezzanine capital and bridge loans, as well as tailored financing for acquisitions, investment properties, developments and refinancing. By combining conventional bank lending with alternative capital sources, he develops financing structures for domestic and international property projects.
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