The economic context has recently been marked by increased volatility and a tightening of conditions for granting traditional bank loans. private real estate debt It has therefore established itself as an essential asset class in 2026. For the investor, it offers a rare combination: attractive returns, often higher than traditional physical real estate, while benefiting from solid guarantees.
At the house of Balmont Conseil, we analyze this solution not only as a tool for portfolio diversification, but as an agile response to the needs of real estate developers (developers, property dealers, renovators). As an expert in wealth engineering, my mission is to open the doors to this for you. alternative financing formerly reserved for institutional investors.
What is private real estate debt?
There private real estate debt consists of a loan granted to a real estate operator by private investors (individuals or institutions) via a fund or platform, outside the traditional banking circuit.
How does investment work? in private real estate debt?
Investing in private real estate debt is akin to taking on the role of a banker. The investor provides capital which is used to finance the acquisition, construction or renovation of assets (offices, residential, logistics).
Debt structure: Senior, Mezzanine and Junior
To fully understand the Risks and returns, It is necessary to distinguish the ranking of the claim:
- Senior Debt: This is the most secure option. It is repaid first and generally benefits from a first-lien mortgage. Its return is more moderate.
- Mezzanine/Junior Debt: It is used as a supplement. Riskier because it is repaid after the senior debt, it offers in return significantly higher rates of return.
The compensation model
The investor receives interest (the coupon) over a fixed period (usually 12 to 48 months). The principal is then repaid. in fine (at the end of the project) or according to repayment models depreciable.
The gross return on a private debt transaction can be calculated as follows:
$$R_{raw} = i + \frac{F_{structuration}}{D}$$
Where $i$ is the annual interest rate, $F_{structuration}$ the possible entry fees, and $D$ the loan term.
Private debt vs. bank financing: the key differences
The 155 B scheme becomes a complex engineering area when dealing with deferred compensation, typical of executives in Tech or Private Equity.
Why invest in private real estate debt?
You may be tempted to invest in private real estate debt for several reasons, including the following:
What risks should be monitored?
All investments carry risks. In the context of private debt, we primarily identify three:
Risk of default
The operator cannot provide a refund. This is where the quality of the guarantees and the selection of market players are crucial.
Liquidity risk
The funds are locked for the entire duration of the loan. This is not a short-term investment.
Market risk
A sudden drop in the value of the underlying asset could weaken the mortgage guarantee.
The expert's opinion: Protection against the defect relies on the "LTV" (Loan-to-Value). We favour cases where the debt does not exceed 60 % to 70 % of the value of the property.
$$LTV = \frac{Loan Amount}{Expertise Value} \times 100$$
How to access this asset class?
There democratization of private debt today allows sophisticated individual investors to access it through various channels:
Specialized Debt Funds (FPCI, FPS)
These funds, managed by approved asset management companies, allow risk to be spread across dozens of projects. They are often accessible from €100,000, offering a secure regulatory framework.
Real Estate Crowdfunding
For more modest entry tickets (often starting at €1,000), crowdfunding allows participation in direct loans on specific projects. It's an excellent entry point for understanding the real estate performance local.
Club Deals
For sophisticated investors, the club deal allows direct investment in a large-scale operation alongside other families or institutional investors, with governance that is closer to the ground.
Trends and Outlook: ESG and Restructuring
Commercial real estate is undergoing a transformation. Private debt is playing a key role in financing the ecological transition. An increasing number of funds are incorporating criteria for sustainability (Art. 8 or 9 SFDR).
The financing of works related to tertiary decree (improving the energy performance of buildings) is a source of cash flow important futures.
Operators who renovate to transform obsolete offices into housing benefit from tailored loan conditions through private debt, because they create value where banks see risk.
FAQ Private real estate debt
Making debt a lever for performance
There private real estate debt is much more than just an alternative to credit. It's a capital strategy sophisticated which allows you to capture the value of real estate without suffering the constraints of direct management.
By combining real guarantees and attractive financing rates, It offers a particularly relevant risk/return profile in the current environment. At Balmont Conseil, we assist you in selecting the best specialized debt fund to align your investments with your long-term goals.
Your assets deserve an innovative approach to financing.
Alexis Sagnier
With over 17 years of expertise in financial engineering, Alexis Sagnier assists executives and expatriates in securing their cross-border challenges.
Sources & References:
- General Tax Code (CGI) : Article 155 B.
- Official Bulletin of Public Finances (BOFiP) : Impatriate regime (BOI-RSA-GEO-40).
- 2025 Finance Law Analysis of recent developments.
- Case law on impatriation : Decisions of the Council of State on reference remuneration.
- ANACOFI Member Booklet : Standards for consulting in wealth engineering.
