Tuscan Capital funds urgent £2.2m developer exit bridge
Bridging lender Tuscan Capital has provided a £2.2m facility in a five-week turnaround to aid a developer client facing expensive forfeit-of-deposit costs.
The lender said the high pressure situation occurred after the developer had exchanged contracts for the purchase of a site – complete with residential planning consent for multiple units – in an area of north London.
With completion date looming, and the client facing delays on the finalisation of his existing 20-home residential project in North West England, Tuscan Capital refinanced the over-running development and released extra capital to enable the acquisition of the London site to complete.
The lender confirmed that the development had overrun due to the impact of the first national lockdown and to difficulties in sourcing essential building materials.
It said its bridging loan – underwritten at 65% LTV for a 12-month term and secured purely on the asset – fully redeemed the incumbent development lender.
The loan will be repaid from the sale of the site’s remaining eight unsold units – 12 have already been sold – all of which are on schedule for completion following final fixes.
Colin Sanders, chief executive of Tuscan Capital, said: “We were approached by Marcus Wood from London-based advisory firm River Commercial to see if we could help his client raise urgent capital to avoid him losing a substantial deposit.
“Up against the clock, we were able to conduct our due diligence quickly and without undue fuss with our underwriting team working in close liaison with our highly experienced asset manager, Pat Gilles.
“Our lawyers, Lawrence Stephens, also pulled out all the stops to close the deal within a five-week timeframe and so allow the client to complete on the purchase in time.”
Marcus Wood, principal at River Commercial, added:“ With my developer client under extreme time pressure, I was anxious to place the deal in the right hands.
“From the moment I called the team at Tuscan Capital they took ownership of the situation, kept me informed throughout the process, and delivered to an extremely tight deadline.
“I know that my developer client is somewhat relieved and more than a little grateful that the deal got done.”