Mezzanine debt and preference equity rank behind the senior bank and is subordinated to the bank’s position.

The facility incurs an interest cost, which is usually capitalised into the facility so as not to impact the developer's cash flows, and is usually not linked to the profitability of the project. However, if structured as a participating mortgage, it has both an interest and profit-share component.
Sometimes referred to as structured equity, its key attribute is that the repayment of capital occurs in advance of and in priority to the repayment of ordinary equity. There is no registered mortgage on equity.
To date, Dorado has provided 68 projects with mezzanine debt or preference equity finance for projects including apartments, townhouses, commercial, house and land, industrial, medical, retirement and subdivisions, in 3 Australian States and Territories.

Case Studies

  • Continuing Townhouse Construction

    Queensland, Australia

    A leading Brisbane based developer was undertaking the construction of a townhouse project in an outer suburb of Brisbane.

    The project’s appointed builder had recently gone into administration and the developer was focusing upon securing a replacement. The developer required a mezzanine facility to continue the construction of the townhouse. Despite the additional risk associated with the need to engage a new head contractor, Dorado were confident that this could be achieved without any material increase in construction costs given that on-site works had yet to commence.

    After successfully completing our detailed due diligence process, Dorado agreed to provide a mezzanine funding solution, whereby funds were drawn contemporaneously with the financial close of the senior debt facility and the execution of a fixed-price contract with the new builder.

  • Refinancing an Existing Land Facility

    Queensland, Australia

    A developer had begun construction of 148 apartments with ground level retail.

    Early works to the first floor of the building were partially completed before the project’s builder was replaced following a building licence issue. Concurrently, the developer was finalising a senior construction loan and seeking to refinance the existing land facility.

    Following a detailed review of the project, and confident in the developer’s track record, Dorado provided a mezzanine debt facility. This enabled the developer to refinance the existing land loan and facilitated the settlement of the senior construction loan.

  • Overcoming Bank Hurdles

    Western Australia, Australia

    A rapidly expanding developer builder had a number of medium size apartment projects at various stages of completion.

    This was stretching the availability of equity funds that the developer was required to contribute to any new project. Further, as the developer was also the builder, banks specified that any non-bank funding would need to be ‘equity-like’ rather than debt. This was prohibiting the commencement of their next 40 apartment and three commercial unit development.

    Dorado provided a funding solution in the form of preference equity. The documentation and structure was satisfactory to the senior bank. In this instance, the Dorado equity and fixed return was in preference to the developer’s equity. This enabled the developer to undertake the project and grow its business.

  • Committing to a Cornerstone Position

    Queensland, Australia

    Dorado was approached by a highly regarded boutique fund management firm specialising in real estate investment opportunities to provide a cornerstone preferred equity position in the development of an integrated healthcare facility in Brisbane’s middle ring.

    Dorado recognised the merit in partnering with a highly experienced group with a strong track record in the delivery, lease-up, and sale of commercial property assets. We undertook extensive due diligence of the proposed project and were satisfied that existing supply constraints within the area in tandem with the area’s continuing population growth would support strong underlying demand for medical space in the centre.

    Dorado’s early equity commitment enabled the developer to focus their efforts upon securing senior construction funding for the project, additional pre-leases to meet the senior funder’s pre-lease hurdle, and execution of the construction contract.

  • Releasing Equity

    Western Australia, Australia

    A developer wanted to release equity prior to completion of a project.

    The boutique apartment project was substantially complete and had secured several pre-sales, but the developer was looking to release equity to fund other project acquisitions.

    Dorado Property was able to quickly conduct due diligence to determine the status of the project and work through the legal technicalities of bringing funds into a project that was underway with existing investors and financing arrangements.

    This allowed the developer to release the equity early and grow the business.

  • Providing Liquidity

    Western Australia, Australia

    An existing investor within an underway project required liquidity.

    A developer who Dorado had funded previously sought funding to provide liquidity for an existing investor.

    Dorado conducted due diligence on the substantially underway project, which was 80% complete, liaised with the existing senior and mezzanine lenders, and put forward a subordinated unsecured debt solution that provided the liquidity required.


Equity sits at the top of the capital stack for development finance.

Equity is repaid in line with all other ordinary equity after the repayment of any structured finance and first mortgage.

To date, Dorado has provided 9 projects, including apartments, townhouses, and house and land with equity finance across two Australian States.



To discuss subordinate finance funding for your next project, get in touch:



To discuss subordinate finance funding for your next project, get in touch:


Davide Bini

Director - Property

+61 473 123 294

WA | NT | SA

Jason Black

Senior Manager - Property Finance

+61 407 696 321