Bridging lender Tuscan Capital has completed a £9m funding facility for a developer client looking to acquire a diverse portfolio of 130 mixed-use, commercial and residential real estate assets, within a timescale of 21 working days.
The lender’s Birmingham office was asked to intervene to help a West Midlands-based property developer fund the purchase of a large portfolio of disparate properties spread across the Midlands.
The developer had agreed to buy the portfolio from a brewery which was off-loading assets. Contracts were exchanged on Christmas Eve 2020, but completion was stalled after the purchaser’s banking partners withdrew their support.
Tuscan Capital was first contacted in mid-February this year as the developer needed an urgent bridging facility from a lender who could deliver funding reliably and quickly to meet the completion deadline of mid-March.
The bridging lender agreed terms with the borrower on 24 February for a £9m, 12-month term funding package at a monthly interest rate of 0.85%. The lender confirmed that the facility was structured as a single loan, cross-collateralised across the whole 130-asset portfolio.
The lender further confirmed that it fully funded the purchase as the borrower put some of its own unencumbered property stock into the deal. As a result, Tuscan Capital said its LTV exposure was under 60% taking into consideration the full Open Market Value of the security.
Once terms were agreed, Tuscan Capital said it initiated an urgent due diligence process involving a disparate range of mixed-use, commercial and residential properties. Given prevailing lockdown restrictions and the imminent deadline, Tuscan said its choice of professional partners for the due diligence process was critical.
BNP Paribas Real Estate in Birmingham was selected to lead the valuation process, while Howard Kennedy LLP was chosen to conduct the legal due diligence element.
Colin Sanders (pictured), CEO of Tuscan Capital, said: “Bringing this deal to a successful conclusion on 26th March, 2021, meant that our client met their deadline, which was a huge relief for everybody.
“Turning the deal around in just 21 working days is proof, I think, that with the right team in place and a positive, proactive mindset, even the most complex of transactions can be brought to a speedy resolution. In short, where there’s a will, there’s a way.
“I must make mention of our superb professional partners on this deal, without whom we could not have delivered for our client. Richard Gill and his team at BNP Paribas Real Estate did a sterling job of valuing the portfolio inside two weeks. The footwork involved in the inspection of such a wide range of assets at a time when lockdown restrictions added to the complexity of the situation was very impressive.
“Producing the valuation report for such a large bundle of diverse property assets, and then verifying the title plans, involved a number of hands-to-the-pump and much working around the clock.
“Steve Clinning and Laura Brown of Howard Kennedy LLP should also be credited for their outstanding team performance in the legal due diligence for the deal.
“The deadline set from the outset looked unlikely to be achievable when presented with 130 individual properties of varying types.
“But with Laura marshalling her team, and dedicating several ‘all nighters’ to the cause, our legal element of the transaction was ready for completion ahead of that of the borrower’s.”
