Arc & Co. & Delancey Real Estate close £19.5 million facility for acquisition of prime mixed-use asset

By Bridging Loan Directory 12th January 2024

Arc & Co. & Delancey Real Estate have closed a senior secured three-year, fixed rate £19.5 million facility to assist a London-based developer with the acquisition of an existing office in St James’s.

The deal is expected to be the first of many in a market which Delancey believes will be an opportune time for its lending business, given the current retreat of traditional financing sources which are further increasing the need for alternative lenders.

The St James’s based property in London’s West End is a prime freehold, 16,000 sqft mixed-use asset, and the acquisition financing offers a rare opportunity for exposure to a freehold asset in the area’s sub-market.

The developer intends to carry out a comprehensive refurbishment of the property once proposed planning has been achieved.

The debt package represents a loan-to-value of c. 70% with the ability for the developer to request capital for the refurbishment.

Philip Kay, Director at Arc & Co. said:

“We were delighted to be given the opportunity to work with two excellent counterparties.

On the sponsor side, the developer’s investment thesis is very robust with investments targeted in strong London locations.

In a difficult environment for 2023, we were also pleased to work with Delancey as a competitive and flexible capital provider with strong appetite for the asset class and business plan.

We look forward to working together with both parties in the near future.”

Commenting further on the market, Martin Farinola of Delancey said:

“Last year was a volatile time in the market. It was still extremely busy sourcing deals, however there was a certain fragility in closing loans due to lower valuations, sponsors deciding not to execute deals because they weren’t accretive to business plans, or other property-related reasons.

The majority of deal flow over the course of the year was certainly refinancing deals rather than acquisitions.

However, in the last few months of 2023 we saw an uptick in acquisitions and attractive deals, signifying a positive market trajectory.”