Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
On Wednesday, April 22 at 4:00 pm (UTC+2), we will open Oficinas Mazarredo II for investment – the continuation of a transaction already familiar to Urbanitae investors.
Following the success of the first tranche, the sponsor has requested to increase Urbanitae’s participation by €1,220,000, bringing the total to €4,220,000. This will allow more investors to take part in a strategy focused on the acquisition, repositioning and subsequent sale of an office asset in central Madrid.
Continuation of an existing transaction
Oficinas Mazarredo II does not represent a change in the investment thesis, but rather a ticket increase following the strong initial close of the deal. The project logic remains the same: acquire an office building with below-market rents, implement targeted improvements, stabilise the asset and ultimately sell it to an institutional investor.
There is, however, one relevant adjustment to the structure compared to the initial plan. While the original approach contemplated acquiring the company that owns the asset, after legal and tax analysis it was decided to purchase the property directly. This allows the transaction to be structured through a new, clean SPV, simplifying the setup and reducing potential contingencies.
An office building near the Royal Palace
The asset is located at 7 Mazarredo Street, in the Arganzuela district, within the M-30 ring road. It is a fully independent office building with a total built area of 3,967 sqm, distributed across a basement, ground floor and three upper floors.
The property was built in 1930 and fully refurbished in 2017, and has held a tertiary/office use licence since 2000.
One of the key strengths of the project is its location. The building is very close to the Royal Palace, Almudena Cathedral and the former Google campus, in a central, established and well-connected area. Nearby transport links include Puerta del Ángel, Ópera and Príncipe Pío stations, as well as numerous bus lines.
The opportunity: below-market rents in a prime location
The asset is currently leased and generating income, but at a rent level below market. This is where the value creation opportunity lies.
The current tenant’s lease – one of the world’s leading flexible workspace operators – expires in June 2027. From that point, the strategy contemplates two options:
- renegotiate the lease with the current tenant at market terms;
- or, alternatively, secure a new tenant at updated rent levels.
In addition, the project includes certain CapEx initiatives and maintenance works, as well as obtaining an ESG certification, with the aim of improving the building’s positioning and making it more attractive to both future tenants and potential buyers.
Once the building is stabilised at market rents, the goal will be to proceed with the sale of the asset.
FREO Group, a specialist value-add manager
The transaction is managed by FREO Group, an international firm specialising in real estate investment, development and asset management.
Founded in 1996 and active in Spain since 2015, FREO has extensive experience in value-add strategies through active management, including asset repositioning, occupancy improvement, lease renegotiation and efficient CapEx execution.
This profile is particularly relevant for a transaction like Mazarredo, where the key is not only the intrinsic quality of the asset, but also the manager’s ability to unlock hidden value in under-rented space.
Investment structure
The transaction will be structured through a capital increase.
The total equity required for the deal amounts to €9,100,000, provided by the manager, Urbanitae investors and co-investors. Of this amount, Urbanitae will contribute €4,220,000, including the first tranche already successfully funded on the platform.
The manager will contribute 10% of the total equity, and the SPV also plans to secure bank financing for the acquisition, with indicative terms already in place for the mortgage loan.
Why invest in Mazarredo Offices II
Oficinas Mazarredo II brings together several differentiating factors within Urbanitae’s typical project universe.
First, it offers exposure to a value-add office strategy – a less common asset class compared to residential, but with a clear value proposition when there is room to improve rents and positioning.
Second, the transaction is supported by several solid fundamentals:
- strategic location in central Madrid, within the M-30;
- competitive acquisition price compared to market benchmarks;
- limited supply of comparable assets in terms of type, size and location;
- and an exit strategy targeting institutional investors.
All of this is underpinned by an office market characterised by limited supply in prime areas and sustained demand for well-located space.
Expected exit in Q2 2028
The estimated project duration is 22 to 26 months.
Key milestones include:
- Q2 2026 – closing of the transaction and acquisition of the asset
- January 2027 – notice to the current tenant and start of renegotiation or search for a new tenant
- June 2027 – expiry of the current lease
- July 2027 – maintenance works, ESG certification and assumed vacancy period
- Q4 2027 – signing of a new lease and start of the exit marketing process
- Q2 2028 – sale of the asset-owning company and distribution of profits
A second opportunity to invest in Mazarredo
In short, Oficinas Mazarredo II offers investors a new opportunity to enter a transaction that already attracted strong interest in its first tranche and maintains its original investment thesis.
The increased ticket size allows more investors to participate in a well-located asset with repositioning potential and a clear value creation strategy based on rent reversion, asset enhancement and sale once stabilised.
If you have any questions, you can contact us at contacto@urbanitae.com or by phone at (+34) 911 23 25 22. You can also watch the webinar we held with the sponsor.
Remember: Oficinas Mazarredo II opens for investment on Wednesday, April 22 at 4:00 pm (UTC+2).
