Commercial Property Repositioning: An Early Stage Fund (£2m-£100m)

January 7, 2021

Commercial Property Repositioning

This facility is ideal for office blocks, nursing homes, hotels etc. The product could be considered as a restructuring or stressed facility for the current owner or an opportunistic investor.

Example 1:

An office block purchase price £4 million with short lease commercial tenants generating £350,000 in rental income.

Request:

Funding to allow a client to purchase the target property. Once purchased, the client will apply for planning permission to reposition the office block as 77 PRS units. With the planning gain the client will enjoy a profit of £2 million. If the PRS scheme is built out, the client will enjoy a profit of £4 million.

Solution:

A specialist debt provider will advance 75% of the purchase price with no profit share. Alternatively, two independent joint venture or equity provider will fund the majority of the purchase price in return for 50% of the profit.

Example 2:

Opportunities to obtain planning permission to build out one of the following:

• Residential Housing Scheme

• Build to Rent Scheme

• Warehouses/Logistics.

Solution:

A specialist fund which likes to invest at an early stage will deploy between £2 million and £100 million as equity participation or mezzanine finance.

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