70% LTGDV Development Finance for office to residential conversion.

Deal Structure

£11.2m facility (gross, including interest & Arrangement Fee)

70% LTGDV & 80.5% Loan to Cost

2% Arrangement Fee

Interest Rate 9.25% per annum

1% Exit Fee (based on the facility amount)

22 months term

Deal Summary

Our client owned a substantial commercial premises which was previously used as offices in the North East of England. He secured planning consent to convert it to 152 residential units and approached us to arrange a Development Finance facility for that purpose.

Our client was a sufficiently experienced developer and contractor, and will therefore utilise his own team to carry out the conversion works. Those works are expected to take 12 months to carry out.

A well established “off-plan” sales agent had been engaged with and indeed a number of pre-sales were already secured, thus demonstrating demand and further supporting the proposed GDV figure.

We arranged a loan giving a maximum gross facility equal to 70% of the Gross Development Value figure (including interest & fees), which refinanced the existing debt and covers 100% of the cost of works, providing just over 80% of total project costs (including finance costs).