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Commercial Property Acquisition – £5 Million in Two Weeks

We’re continuing our series of blogs, where I’m telling the stories behind some of the recent deals we’ve done.

They’ll give you an insight into the types of funding we can arrange, and help you understand some of the ways in which we’ve assisted our clients get finance.

This week, we’re looking at a property developer and investor, who’d exchanged contracts on a Central London property and needed to complete – but only had 2 weeks left.

What could we do to help?

So, £5 million in two weeks. Here’s what happened……

The Background To The Deal

  • Our client was a successful property investor and developer who had exchanged contracts on a 20,000 square feet mixed use commercial and residential property in Central London.
  • The property consisted of a restaurant and retail unit on the ground floor together with office and residential accommodation on the floors above.
  • Following completion of the purchase our client was intending to carry out an extensive program of refurbishment.
  • However, there was the threat of another buyer, and our client did not want to miss out on an excellent development opportunity.
  • As a result, he had taken the commercial decision to exchange contracts and now had two weeks to complete!
  • Could we help?

What Were The Problems?

There was one critical problem – time!

  • Our client knew this was a great deal and he didn’t want to lose it.
  • As a result, he had taken the commercial decision to exchange contracts.
  • But now he only had 2 weeks to complete and needed to raise £5 million.
  • It was at this point that we were introduced to the client by his solicitor

How Did We Solve the Problems?

  • Having had the introduction, the first thing we did was meet our client. We call this meeting our DEEP DIVE EVALUATION and is arguably the most important thing we do.
  • During that initial meeting we take the time to completely understand our clients funding requirements and as a result suggest possible solutions.
  • Clearly, in this case, we needed to move quickly.
  • A valuation had already been carried out, so the first thing we did was present the deal to our chosen lender together with a copy of the existing valuation.
  • The lender agreed to accept the existing valuation which of course saved time.
  • Within 48 hours we had also arranged a meeting on site between our client and the lender.
  • 48 hours later the deal had been formally agreed and a letter of offer was issued.
  • We continued to liaise between the client, the lender and the solicitors to ensure completion occurred within the two-week timescale our client required.

What Were The Benefits To Our Client?

  • To avoid losing the deal our client had taken the commercial decision to exchange contracts. However, this had left him with near impossible time scales.
  • Having carefully analysed the deal, we approached one of our specialist lenders and dealt directly with the Head of Property Finance.
  • He understood our client’s very specific requirements and was used to working to tight deadlines, which was a huge benefit to the client.

In Summary

  • Property investors and developers sometimes need to work to tight time frames. This can mean their own bank isn’t always able to help because they can’t move quickly enough.
  • As a result, it is vital to have access to alternative sources of finance.
  • Our experience means we have developed the right contacts with the right lenders, enabling our clients to be able to “tap in” to those contacts.
  • In “tapping in” to those contacts, our client was able to get exactly the funding he needed.
  • £5 million in two weeks!

Result? One very relieved client!