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Office to Residential Conversion

£2.4m Development Finance and Exit Loan for Office to Residential Conversion Scheme in SE London

  • Loan: £2,100,000
  • Term: 18 months
  • Charge: 1st
  • GDV: £4,300,000
  • Site: Office to residential conversion
  • Exit: Sale of completed units

Joe came to us part way through a build project that he was managing. Having purchased an office building with sitting tenants back in 2013, the purchase was made with a view to getting full planning and consents to convert and extend the existing building into residential units.

Our client purchased the property using a commercial term facility, but once full planning permission was granted, he obtained a development finance facility from a high street bank to start the works.

The construction and conversion works progressed at the expected rate, however Joe started to struggle to get the necessary stage draw down of funds in a timely manner from the high street bank.

Joe got in touch with us to see what other options might potentially be available to him as the perceived lack of urgency on the part of the High Street lender was causing issues with the progression of the project. He was also interested in leveraging a bit more cash than what the high street was offering. This was with the aim of delivering the project to a higher specification.

Our head of development finance, Dave Fathers and finance consultant Kirsty Botten worked with Joe to understand how further hold-ups in the draw down / funding process would potentially result in the client losing out on specialist contractors that were lined up for the critical phase in the project.

While talking through with Joe, it was determined that he wanted to increase the specification of the end product for each of the units. For this to be realised Dave positioned the scheme with a lender who specialises in conversion schemes, this particular lender were very accommodating to the needs of the borrower and were happy to increase the borrowing against the site to suite.

Solution

  • 2% Arrangement Fee
  • 7% pa
  • 1% Exit fee
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