Development Exit Bridge

Published by Silver Oak Capital -

Lending Query

We were approached by a developer who was in the final stages of completing the construction of a luxury residential development in North West London. It consisted of 25 apartments. The developer had done little marketing given the state of the luxury residential market at the time – but had at least secured presales in the form of 4 exchanged units. The lender required a bridging loan to refinance the outstanding development and Mezz facilities in order to allow more time to market and sell the remaining units. A bridging loan of £19million GBP was required.

Client Circumstances

The developer had run over on their build schedule and hence required a refinance whilst the scheme was only partly complete (80%). This was also the first luxury/high-end scheme the developer had attempted – and by far the largest.

Problems To Solve

The major challenge on this deal was finding a lender who could get comfortable with lending on a partially completed residential development. We had to present a clear and concise exit and marketing plan to the lender whilst ensuring a strong valuation report would give them additional comfort.

Solution Provided

Through our in-depth knowledge of the UK bridging market, we were able to put together the following solution for our clients.

Bridging Loan of £19 million GBP (Gross)

Rate 0.75% per month

Term 12 Months

Max 73% LTV

15% Personal Guarantee