Reference
Traditional banking
- Decision criteria
- Risk policy and pre-sales
- Pre-sales required
- 30 % – 50 %
- Building permit
- Usually required
- Land purchase
- Rarely financed
- Asset types accepted
- Standard residential
- Uses bank risk capacity
- Yes
Financing solutions
Alternative real estate financing in Spain and Portugal
Four debt solutions for developers and investors, from 7 to 100 million euros. We finance acquisition, construction and operating assets, including the phases a bank cannot yet enter.
Analyze your project
We assess every deal case by case
- Soluciones de deuda
- 4
- Rango de operación
- 7 – 100 M€
- Mercados
- ES · PT
The concept
What alternative real estate financing is
Alternative real estate financing encompasses all non-bank sources of capital that finance projects in the sector: debt funds, specialist direct lending platforms, insurers and co-investment vehicles.
It is not a substitute for bank financing, nor a last resort. It is a complement that steps in where bank risk policy cannot reach: buying land while the permit is being processed, starting construction before reaching the pre-sales threshold, an atypical asset type, or an asset that is not yet stabilised. Once those milestones are reached, the financing can be refinanced with bank debt.
In Spain and Iberia the segment has grown strongly in recent years, driven by developers who need execution certainty and structures a bank cannot offer. Xenia Capital has operated in that space since its founding, and since Oaktree Capital Management's entry into its capital it does so with committed resources and the capacity for larger transactions.
Alternative financing versus bank financing
We do not compete with your bank. We step in where it cannot yet enter, and step back once it can.
Our proposal
Xenia Capital
- Decision criteria
- Viability of the asset and the developer
- Pre-sales required
- Not required
- Building permit
- Not always required
- Land purchase
- Can be financed
- Asset types accepted
- Residential, hotel and living
- Uses bank risk capacity
- No
Our four financing solutions
Each one covers a different phase of the asset's life cycle, from land acquisition through to the operation of the completed property.
Bridge Loan · Acquisition
01
Bridge Loan
Short-term financing to cover a capital need during a transitional phase. The most common case is the acquisition of land or an asset when the purchase must close before meeting a bank’s requirements.
- Maximum LTC / LTV
- 80 % / 50 %
- Amount
- 7 – 50 M€
- Interest rate (p.a.)
- 6,5 % – 8,5 %
- Term
- 6 – 24 months
- Disbursement
- Single
Development Loan · Construction
02
Development Loan
Financing for the construction or refurbishment costs of a real estate project. Funds are disbursed progressively against works certifications verified by an independent Project Monitor.
- Maximum LTC / LTGDV
- 85 % / 70 %
- Amount
- 7 – 100 M€
- Interest rate (p.a.)
- 5,5 % – 7,5 %
- Term
- 24 – 60 months
- Disbursement
- Against certification
Acquisition and development
03
Whole loan
Covers, under a single structure, the acquisition of the asset or land and the subsequent development costs. It finances the purchase, refinances existing debt and covers construction, in tranches disbursed by milestone.
- Covers
- Purchase and construction
- Structure
- In tranches
- Disbursement
- By project milestone
- Refinancing
- Existing debt included
- Conditions
- Depending on the transaction
Stabilised assets
04
Investment loan
Medium- and long-term financing for completed, operating, cash-generating assets. It is used to refinance a construction loan or bank debt, acquire an income-producing asset, recapitalise equity or finance improvement plans.
- Asset
- Completed and operating
- Horizon
- Medium and long term
- Leverage
- Higher than bank leverage
- Repayment
- Linked to the asset's cash flows
- Structure
- Depending on the business plan
Comparison of the four financing solutions
The same variables across all four solutions, to place your transaction at a glance. Reference conditions: each transaction is analysed individually.
Asset types we finance and with which solution
The same asset can fit more than one solution depending on the phase it is in. When several apply, the final structure is decided during the preliminary analysis.
¿No ves tu activo en la tabla? Escríbenos igualmente: la clasificación orienta, pero cada operación se estudia de forma individual.
Sectors we finance and services available in each one
Four real estate verticals in Spain and Portugal. For each one we indicate all applicable solutions and the typical exit for the transaction.
Sector 01
Applicable services
Residential build-to-sell
Residential development for sale, where the loan is repaid with the proceeds from the handover of the homes. It is the largest asset type in our portfolio by volume.
- Phases covered
- Land, construction and sales
- Typical exit
- Sale of units
- Investment loan
- Not applicable
Sector 02
Applicable services
Residential build-to-rent
Residential for rent, where pre-sales are not possible and the project is financed on the basis of viability. Once stabilised, the asset can be refinanced with an Investment loan.
- Phases covered
- Land, construction and operation
- Typical exit
- Refinancing or sale
- Distinctive feature
- No pre-sales
Sector 03
Applicable services
Hospitality
Hotels and aparthotels, both new-build and repositioning of existing assets. We finance the acquisition, the conversion and, once operational, the refinancing of the asset.
- Phases covered
- Acquisition, construction and operation
- Typical exit
- Refinancing or sale
- Distinctive feature
- Operator and management agreement
Sector 04
Applicable services
Alternative living
Coliving, flex living, serviced apartments and short- and medium-stay accommodation. Alternative residential models that traditional banks rarely fit into their risk policies.
- Phases covered
- Acquisition, construction and operation
- Typical exit
- Refinancing or sale
- Distinctive feature
- An atypical asset type for banks
What we do not finance
To save you time: these transactions fall outside Xenia Capital's focus and we will not be able to analyse them. Our minimum ticket is 7 million euros.
- Mortgages for individuals
- Change of primary residence
- Residential self-build
- Renovations of private homes
- Personal loans
- Non-real-estate assets
- Transactions outside Spain and Portugal
- Amounts below 7 M€
Application process, common to all four solutions
Six phases from when a transaction reaches us to disbursement, whichever solution fits.
Step 01
Transaction intake
You tell us about the transaction with an executive summary, the team's track record and the business plan.
Executive summaryStep 02
Preliminary analysis
The investment team identifies which solution best fits and whether the transaction falls within our focus.
Investment teamStep 03
Letter of intent
We propose in writing the amount, leverage, pricing, guarantees and conditions precedent.
Term sheetStep 04
Due diligence
Valuers and legal and technical advisers review the asset and the transaction, with KYC/AML checks.
External advisersStep 05
Investment committee
The committee approves the transaction and its final structure.
With OaktreeStep 06
Formalisation and disbursement
Signing before a notary and disbursement according to the agreed structure: single or in tranches.
Notarial deed
Documentation required to apply for financing
The more complete the initial information, the stronger the preliminary analysis. You do not need everything finalised to start the conversation.
01
Executive Summary
One or two pages covering the asset, the amount you need, the structure you propose and the exit.
02
Financial information
Financial statements of the company applying for financing and of any guarantors.
03
Valuation
A valuation of the land or asset by an accredited valuation firm, if you already have one.
04
Planning information
Zoning, permits and any encumbrances affecting the asset or the land.
05
Business Plan
A business plan with an execution, sales or operating schedule, depending on the transaction.
06
Developer track record
Comparable transactions the team has successfully carried out.
07
Financial model
Assumptions, stress scenarios and monthly cash flows for the transaction.
08
Registry status
Land registry extract and ownership of the asset that will serve as collateral.
Frequently asked questions about our financing solutions
What developers ask us before submitting a transaction.
What is alternative real estate financing?
It is the financing of real estate projects by specialized platforms and investors, outside the traditional banking circuit. It allows debt to be structured on a bespoke basis when banks cannot support a deal, whether because of pre-sales, the type of asset or the stage the project is at.
What is direct lending in real estate?
It is the direct financing of real estate projects by specialized funds and platforms, without bank intermediation: the lender analyses, structures and disburses the loan using its own capital or that of the funds it manages. It covers land acquisition, construction and the operation of assets, with criteria focused on the viability of the project. Xenia Capital operates under this model in Spain and Portugal.
What is the minimum amount for a deal?
Our minimum ticket is €7 million per deal, across any of the four solutions. As a reference, the bridge loan goes up to €50 million and the development loan up to €100 million; for the whole loan and the investment loan, the amount is defined deal by deal.
Do I need pre-sales to access financing?
No. Pre-sales are just one more factor in the analysis, not a prerequisite. We assess location, product, the development team and the viability of the business plan as a whole.
What types of projects do you finance?
Residential build-to-sell and build-to-rent developments, hotels and alternative living, as well as refinancings and acquisitions of operating assets, in Spain and Portugal. We do not rule out projects because of their type: we assess them on their viability.
Can I combine several solutions in the same deal?
Yes. It is common for a bridge loan to finance the purchase of the land and for a development loan to replace it once the permit is granted, or for an investment loan to refinance the works once the asset has stabilized. If you prefer a single structure for the purchase and the works, the whole loan brings them together in one contract.
What is the difference between the whole loan and taking out a bridge loan and a development loan separately?
The whole loan brings together, in a single contract, with a single creditor and a single security package, what would otherwise be two financings chained together. It simplifies execution, increases leverage on total cost, and avoids coordinating two schedules and two prices. Taking out a bridge loan and a development loan separately makes sense when there is a long period between the purchase and the works, or when the works will be financed with bank debt.
Do you finance assets that are already completed and operating?
Yes, with the investment loan: hotels, residential for rent, student housing, coliving and flex living that already generate income or are stabilizing. It can be used to acquire, refinance, reposition or release equity from an asset.
What asset types do you finance?
Residential build-to-sell and build-to-rent, hotel and alternative living (coliving, flex living, serviced apartments and student housing), in Spain and Portugal. We do not rule out a project because of its type: we assess it on its viability and on the quality of the developer.
Do you replace banks or complement them?
We complement them. We step in where banks cannot yet step in: without pre-sales, without a final permit, or with asset types outside their risk policy. Our financing does not use up bank risk capacity and, in many deals, the exit is precisely a refinancing with a bank.
Not sure which solution fits your transaction?
Tell us about the project and the investment team will propose the structure.