Development Exit Bridge
Published by Silver Oak Capital -
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.
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.
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