Chat with us, powered by LiveChat

Mezzanine Debt & Preferred Equity

Over the years we have successfully funded many Commercial Property Loans, the following are a small selection for your review:

 

Our client is one of the largest Queensland based developers. Their existing lender due to the global financial crisis was unable to extend them any additional funding even though their gearing level was reasonably conservative.

Our clients needed additional funding of $10M for working capital purposes and they preferred to use one of their residential developments as security rather than tying up their entire portfolio as that would have been cumbersome and unworkable. The project is about to commence, has a GRV of $96.3M and has already achieved pre sales of $80M.

Solution

GCC facilitated an approval for mezzanine facility which allowed for $10M of working capital to be released, secured against the residential development based in Central Queensland.

Facility Amount: $10,000,000
LVR: 78% of GRV
Rate: 22%

 

 

Our client had an absolute ocean front development site of 22,410 sqm which was approval for 104 luxury residential units.
The GRV was $220M and the borrowers required $165M, 75% of GRV to refinance and complete the project.

An approval for $130M for a senior was secured and a mezzanine facility of $35M was required to cover the funding shortfall.

Solution

GCC facilitated an approval for mezzanine debt facility which covered in full the $35M shortfall against the residential development based in Central Queensland.

 

Mezzanine Facility: $35,000,000
LVR: 75% of GRV
Rate: 15.50%

 

 

A small to medium sized boutique builder based in Sydney approached us with a difficult scenario. The client needed more working capital/funds due to a cost blow out. Their existing lender was unable to extend them funding as circumstances had changed. They needed an additional $2M to continue.

Solution

GCC facilitated a mezzanine facility of $2M to allow the project to continue to successful completion.

 

Our client entered into a contract to purchase a vacant residential development site, situated in a popular Sydney beachside suburb for $5.0M. They paid a deposit of $500k, based on an offer from their existing bank lender to fund the purchase of the site, and construction of 6 apartments with a GRV of $12.2M.However even with $6.2M pre-sales (50%) which included one to the vendor, the client’s bank reviewed the ‘offer’ and reduced the LVR to a level that made settlement of the purchase impossible.

Solution

GCC was approached as the “Notice to Complete” was issued by the vendor, so if funding was not arranged urgently, our client would lose their deposit. GCC arranged a Senior Debt geared to an LVR of 80% of TDC.
Additionally, we introduced mezzanine finance to enable settlement of the property and cover the $8ooK equity shortfall.

 

Our client owned a commercial site in metropolitan Perth where they proposed to construct an industrial warehouse/office complex comprising 3 units, occupying one of the completed units, with the other units either sold or leased on completion.

Total funding required was $6.2M, which included repaying off the existing liability against the development site. Funding for the original land acquisition was provided by our client’s existing lender – a major bank, that was cross-collateralised with other securities, however their bank was not prepared to assist with the construction finance requirement.

Solution

GCC stepped in to secure a combination of Senior and Mezzanine debt to meet the total funding requirement of the client. Senior Debt was secured through a major bank ($5.36M) for a period of 12 months.

Facility Amount: $5,360,000
LVR: 80% of TDC & 65% of GRV
Mezzanine Facility
Amount: $750,000
LVR:75% of GRV.

 

Our client was a first-time developer looking to develop 15 townhouses, with the aim to keep all of them support their retirement. The properties were owned with minimal debt and a DA already obtained. The client contacted the major banks for funding, however were unable to assist. The reasons given were due to a lack of experience, insufficient equity and no presales.

Solution

Without hesitation, GCC could see the wealth of potential, successfully mitigated the lack of experience and got the project off the ground with a combination of private and mezzanine funding. The client was thrilled that we could see outside the box and were pleased with the flexibility of their loan. We delivered a competitive rate, leading LVR’s, quick turnaround and support to assist the client in undertaking their first development including no requirement for any pre-sales.

 

The client owned an unencumbered residential development site and had obtained approval for the development funding to construct 15 townhouses with basement level parking for 20 cars in Western Sydney suburb of Wentworthville.

The client was a first-time developer but with a background in engineering. Due to the time delay in obtaining approval and hurdles relating to construction costs having escalated the borrower was short of funds required to commence construction.

Solution

We recommended the proposal for mezzanine finance on a no-presales basis given the advanced stages of works, land being free of encumbrance and LVR of 69% limited to 75% of TDC.