Urban Partners deploys EUR 50 million in mezzanine financing

Velo Mezzanine Credit Fund, advised by Velo Capital, has successfully deployed EUR 50 million equivalent in mezzanine financing in Sweden across two transactions for two distinct borrowers. The two recently completed transactions financed assets in the residential and commercial office sectors, highlighting the growing demand for alternative financing solutions as traditional banks remain cautious about leverage levels.

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In a market where securing financing for real estate projects has become increasingly challenging, mezzanine financing emerges as a valuable solution. By bridging the gap between traditional senior debt financing and equity, it enables sponsors to optimize use of their capital while meeting financing requirements. However, Velo Capital acknowledges that there is still a significant learning curve regarding the utilization of mezzanine financing in the market among all market participants.

“Many sponsors perceive mezzanine financing as unviable, but this is a misconception that needs to be challenged. Mezzanine loans can be structured and tailored flexibly to help sponsors maximize the impact of their equity investment and navigate financing challenges successfully. Our recent transactions exemplify the immense potential of mezzanine financing in overcoming traditional funding obstacles and strategically leveraging capital”, said Lesley Lanefelt, Head of Nordic Investments at Velo Capital.

The rise in demand for alternative funding sources reflects the challenges of accessing traditional bank financing. Mezzanine loans offer flexibility in capital structures and contrary to common misconceptions, this type of financing can support leverage enhancement, capex requirements, and fund restructurings.

Urban Partners, via its investment strategy Velo Capital, remains committed to supporting sponsors and developers in the ever-evolving real estate market by providing tailor-made mezzanine and whole loan financing solutions. Velo Capital’s extensive local network, deep expertise, and sustainability-driven approach position them as a trusted partner for real estate financing within the Nordics and Germany.