ARC & CO. STRENGTHENS TEAM WITH NEW ASSET FINANCE ADVISOR

Specialist real estate advisory firm Arc & Co. has further strengthened its market-leading capabilities with the recruitment of Sam Beaumont as an asset finance advisor.

Sam joins from OakNorth Bank, where he was a debt finance analyst. In his new role he will be working closely with director Tom Berry, focused on delivering commercial, development and bridging solutions for clients.

Based in Fitzrovia, London, The Arc & Co. Group is a specialist asset finance advisory company. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, mortgages and leasing.

Sam Beaumont, asset finance advisor at Arc & Co., said: “Having previously worked in the debt finance team at OakNorth, experiencing deal execution on the lender side, I am well equipped to work directly with borrowers, using my knowledge to give the best possible service to our clients.

“I’m looking forward to exploring new asset classes and equity solutions, expanding my knowledge of the real estate debt/equity market.

“During such a challenging time in the market, I’m pleased to be able to advise clients when they need it most, providing the confidence and comfort that their assets are in good hands.”

Tom Berry, director at Arc & Co., added: “I’m very pleased to welcome Sam on board. His background working with a bank will be a valuable addition to the team’s collective experience, expanding the breadth of advice we can offer.

“Our team is growing, and we look forward to being able to assist even more clients over the coming months.”

Sam can be contacted via email (sam@arcandco.com) or at Arc & Co.’s London office at 60-62 Margaret Street, London, W1W 8TF.

ARC & CO. DELIVERS 68% LTGDV ON DEVELOPMENT WITH £1.5M-PLUS UNITS

Specialist real estate advisory firm Arc & Co. and Clearwell Capital have completed on a 68% LTGDV facility on a site in Dulwich, London

Arc & Co. and Clearwell worked together to provide a gross loan of £3,265,000 to the developer, whose equity position meant that maximum leverage was required.

While providing the stretched debt, Clearwell was also able to support the high value units—each of the three houses is valued at between £1.5m and £2m.

Particularly in the present environment, it’s commonplace for developers to need to optimise gearing.

Through its unrivalled network and relationships with lending partners, Arc & Co. obtains the desired outcome for its clients, as illustrated in this transaction.

Tom Berry, Director at Arc & Co. said: “Certain lenders find it difficult to support development schemes with high value units.

“However, collaborating with Callum and Harry at Clearwell proved that it can be done—and better still with stretched leverage up to 70% LTGDV.

“It’s hugely positive to see this sort of appetite from funders.”

Callum Ferguson, Head of Business Development at Clearwell Capital, commented: “We are delighted to have completed this development facility with Arc & Co., reinforcing Clearwell’s support for SME property developers in the current climate.

“Following the initial introduction, Tom was extremely professional, communicating effectively with both sides to ensure a smooth completion.

“We look forward to working with the team on future transactions.”

ARC & CO. AND BANQUE HERITAGE STRUCTURE COMPLEX REFINANCE ON CHF 7M SWISS CHALET

Specialist real estate advisory firm Arc & Co. has arranged a new CHF 7 million loan from Banque Heritage to refinance a chalet in Crans-Montana, Switzerland. The loan was arranged on behalf of a HNWI via his Swiss holding company.

Just over half of the facility has been used to repay an existing loan held against the asset and fund renovation works, with the balance providing capital for an investment portfolio to be held and managed by Banque Heritage.

The distinctive 465 sq m chalet occupies a highly prestigious site in Crans-Montana. Located in the French-speaking part of the canton Valais in the southwest of the country, Crans-Montana is one of the most prestigious skiing resorts in Switzerland, regularly featuring in the FIS Alpine Ski World Cup schedule.

Paul Davies, Regional Chairman – APAC at Arc & Co., said: “The international nature of this deal presented a complex set of circumstances, requiring a flexible approach to successfully secure the necessary funding. By working with a Swiss private bank such as Banque Heritage, we were able to take advantage of genuine local understanding to deliver a bespoke solution, with the newly created investment portfolio further deepening the relationship between the two parties. We look forward to working with Banque Heritage on future opportunities.”

Michael Welti, Head of Private Banking at Banque Heritage, added: “One of Banque Heritage’s advantages of being a boutique-sized private bank in Switzerland is the efficiency, agility and speed of execution. With our decades of experience with bespoke solutions to our families and clients, Banque Heritage was not only able to provide a financially beneficial solution to the client, but also efficiently handle all the paperwork and regulatory requirements. Our Senior Bankers truly understand the client centric approach how to serve Entrepreneurs and Executives and offer pragmatic solutions.”

ARC & CO. AND LONDON BELGRAVIA COLLABORATE TO SECURE MORTGAGE ON UNWARRANTIED HOME

Specialist debt advisor Arc & Co., in collaboration with expert defects insurance broker London Belgravia Group, has arranged a new £450,000 mortgage from West One for a barn conversion in Gloucestershire on behalf of a private client.

The client had previously told that the property was unfinanceable due to it being built five years ago without a professional consultants certificate (PCC) or warranty in place. London Belgravia sourced a bespoke warranty, while Arc & Co. liaised with West One to ensure it would be acceptable for mortgage purposes before it was purchased.

As a result of the strategic partnership between Arc & Co. and London Belgravia, the client was able to secure the mortgage at competitive pricing, while parallel sharing of information and valuations mean the loan was agreed to a tight timescale. The mortgage was agreed at 5.44% fixed for five years.

Gareth Briggs, head of UK residential mortgages at Arc & Co., said: “It is hugely pleasing to have arranged a mortgage for a property that the client had previously been told was ‘unfinanceable’. With no warranty or PCC in place, there were significant barriers to be overcome, but thanks to the close working relationship between Arc & Co. and London Belgravia, we were able to reach a result that worked for everyone. We look forward to further collaboration with London Belgravia.”

Giles Fallan, CEO of London Belgravia Group, added: “This deal perfectly illustrates the benefits to clients of the strategic partnership between London Belgravia and Arc & Co. By combining our expertise and collaborating on such deals, we have reached an innovative solution that has resolved an issue that had caused considerable concern for the owner. Our relationship with Arc & Co. is all about combining complementary capabilities, and it is fantastic to see the partnership delivering for clients.”

ARC & CO. ARRANGES £4 MILLION NOTTING HILL MORTGAGE

Specialist debt advisor Arc & Co. has arranged a new £4 million mortgage from a UK-based Swedish private bank to finance the purchase of a family home in Notting Hill, London on behalf of a private client.

The property was acquired for £5.25 million, with the interest only mortgage provided at 76% LTV, with the mortgage structured with an offset facility to allow the clients to utilise funds released from share schemes. The clients also owned multi-jurisdictional assets, with a complex income structure related to share options.

The home is situated on Westbourne Grove, one of the area’s most desirable streets, and offers four bedrooms across ground, lower ground first and second floors, as well as a sizeable private garden, office and self-contained studio room.

Gareth Briggs, head of UK residential mortgages at Arc & Co., said: “The specific circumstances of this mortgage demanded a high degree of trust between all parties. The private bank’s relationship banking model means it had the flexibility and insight to understand the client’s more complex financial requirements.

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London and operating across the UK, Europe and Asia. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO. ADVISES ABILITY GROUP ON £24.6m LOAN FOR BRISTOL AIRPORT HOTEL

Specialist debt advisor Arc & Co. has arranged a new £24.6 million facility from ASK Partners on behalf of Ability Group, secured against the Hampton by Hilton hotel at Bristol Airport.

The facility is being used to refinance an existing loan and fund an extension to the hotel which will provide a further 50 bedrooms.

In June this year the airport reached a one million passengers per month milestone and has recently received planning permission to undergo an expansion. The expansion includes upgrades to the terminal building, parking and public transport links, allowing for an increase in the annual number of flights departing from the airport and an increase in the total annual passenger capacity from 10 million to 12 million passengers per annum.  The expansion will generate a significant number of new jobs both regionally and at the airport.

Ed Horn-Smith, Managing Director of Arc & Co. said: “Situations such as this, featuring not only the refinancing of an existing facility but also providing development finance to extend a high-performing asset, demand a lender with a firm understanding of the underlying fundamentals and the flexibility to provide a bespoke solution. ASK Partners has a strong track record on deals such as this, and it is fantastic to reach a position that works for all parties. We look forward to working with both Ability Group and ASK Partners on future projects.”

Daniel Austin, CEO and Co-founder at ASK added: “We were delighted to work with Arc & Co. on this transaction to provide Ability Group with the funding required to expand this successfully operated hotel, managed by a well-known brand, in line with the airport’s growth plans. The proposed build, in keeping with the original construction will extend the hotel without disrupting the hotel’s on-going operations. Bristol Airport is the UK’s 8th largest airport, servicing commuters from the Southwest England and Wales. With the increase in travel and terminal side hotel demand post-Covid, coupled with the Bristol airport expansion plans, we felt this was a strong business proposition that we were happy to underwrite.”

ARC & CO. RECRUITS VISHAL DIXIT AS SENIOR BROKER

Specialist debt advisor Arc & Co. has strengthened its team with the appointment of Vishal Dixit as senior broker.

Vishal joins from Pivot, a senior debt lender with a focus on development, where he headed up the origination function since 2017 and was responsible for devising and executing new business strategy, originating facilities of circa £200 million across more than 200 diverse transactions with a GDV of £330 million, with zero capital loss. During his career, Vishal has worked for a number of investment banks and asset management firms including JP Morgan, Morgan Stanley and Schroders Investment Management.

In his new role, Vishal’s focus will be on securing and delivering innovative financing solutions for clients, in particular residential and commercial development facilities. His arrival follows Arc & Co.’s recent unveiling of a new partnership structure, the appointment of James Fleming to the newly-created position of executive chairman and a series of senior promotions – all designed to enhance career development and position the firm for continued growth.

Andrew Robinson, CEO of Arc & Co., said: “Vishal’s considerable experience of the real estate finance market, especially with development facilities, is hugely valuable and will help Arc & Co. provide an even better level of advice and insight to our clients. We are always seeking talent that can complement our innovative, market-leading approach, and Vishal’s arrival underlines our ambitions as we look to broaden our capabilities across not only our existing strengths but new sectors and geographies too.”

Vishal Dixit, senior broker at Arc & Co., added: “Arc & Co.’s reputation in the debt advisory market is second-to-none, and as such it is exciting to be joining the team at a time when it is looking to expand its reach. As borrowers grapple with a range of challenges, the role of top-tier advice becomes ever more important, and I look forward to helping the team continue deliver results for clients.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO. STRENGTHENS TEAM WITH SENIOR PROMOTIONS

Specialist debt advisor Arc & Co. has moved to strengthen its team with four senior promotions.

Tom Berry, Cameron Hayes and Philip Kay have all been promoted to director, while Gareth Briggs becomes head of UK residential mortgages.

The promotions follow the recent unveiling of a new corporate structure at Arc & Co., including James Fleming moving to the newly-created position of executive chairman and the creation of partners for the first time. The new partnership structure has been designed to further brokers’ career development and enhance their involvement in the firm’s wider activities, positioning Arc & Co. for continued expansion.

Andrew Robinson, CEO of Arc & Co., said: “These promotions are just reward for excellent performance, and reflect the new structure we have put in place to ensure clients continue to receive the very best advice. Tom, Cameron, Philip and Gareth are all key members of our wider team, and it is fantastic to reward their efforts with these promotions and set them on the path to the newly-created partnership positions. Alongside James Fleming taking up the new role of executive chairman, this strengthens our senior team to position Arc & Co. for future growth.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO. COMPLETES ON £85 MILLION OF DEALS IN JULY AND AUGUST

Arc & Co. has completed on £85 million of new loans during the past two months, with 24 separate loans arranged with 16 different lenders.

The deals were across a full range of sectors and geographies, including residential mortgages in the UK and Europe, commercial asset refinances, residential development loans and buy-to-let portfolio facilities. Advice was provided by Arc & Co. on a wide spectrum of structures, such as senior debt, mezzanine debt and equity.

Andrew Robinson, chief executive officer of Arc & Co., said: “Summer is traditionally a quiet period for the real estate finance market, but the performance of our team during July and August highlights the ongoing appetite in the marketplace.

“£85 million of transactions – an average lot size of £3.5 million – demonstrates the resilience of the Arc & Co. team in going above and beyond to source finance and finalise deals in a turbulent market. It is also worth nothing the breadth of sectors, structures and geographies that we have worked across during this time. It is a source of great pride that we were able to deliver such strong results over the past two months.

“As we move into Autumn, there is clearly a great deal of demand for finance – and pool of lenders willing and able to provide it – as investors and owners grapple with issues ranging from EPC upgrades and rising development costs to increased interest rate pressures and cover ratio difficulties. We stand ready to help all our clients address the challenges they face, with our trademark innovative approach and commercial focus continuing to deliver results.”

ARC & CO LAUNCHES NEW CORPORATE STRUCTURE WITH APPOINTMENT OF JAMES FLEMING AS EXECUTIVE CHAIRMAN

Specialist debt advisor Arc & Co. has unveiled a new corporate structure to support its continued expansion, with James Fleming moving into the newly-created role of executive chairman.

James has been chairman of Arc & Co. since September 2021, during which time the firm has expanded into new sectors and attracted new talent. As executive chairman, James will have greater involvement in day-to-day activity, enabling him to provide greater support to the wider team and drive further expansion of the group’s services and business partnerships.

James was formerly head of international banking at Coutts & Co., chief executive of Arbuthnot Latham and chief executive of multi-family investment office Sandaire. His experience in running large banking teams, alongside designing and implementing company structures while ensuring the provision of highest-quality advice, remains a key part of Arc & Co.’s expansion strategy.

The new corporate arrangements include the creation of a partnership structure for the first time, designed to broaden brokers’ career development opportunities and enabling greater involvement in the wider group activities. Alongside a simplified team management, the partnership will position Arc & Co. for continued growth.

Andrew Robinson, CEO of Arc & Co., said: “As Arc & Co. grows, it is essential to adapt to better reflect the aims of the business, to attract and develop talent, and continue to provide clients with the very best advice. These new arrangements, with the creation of an executive chairman role and new partnership structure level, puts Arc & Co. in the ideal position to expand its areas of expertise while deepening the brokers’ involvement into other aspects of the firm’s services.

“During James’ chairmanship of Arc & Co., the firm has made great strides in expanding its reach into new sectors and continuing to deliver the very best in debt and equity advice to clients. This new role will enable James to provide even greater day-to-day influence and support, developing our services and business partnerships, as we look to further evolve and remain at the forefront of the market.”

James Fleming, executive chairman of Arc & Co., said: “I am as excited about the future of Arc & Co. as I was when I first joined the team and its inherent strengths, including its reputation for delivering the very best in advisory services, make it uniquely well-positioned for further growth. Becoming executive chairman will enable me to continue to help guide the firm’s strategic direction, facilitate new services and partnerships and assist its ongoing expansion.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO ARRANGES £10.4 MILLION LONDON INDUSTRIAL DEVELOPMENT LOAN

Specialist debt advisor Arc & Co. has arranged a new £10.4 million loan from Ortus Secured Finance to facilitate the acquisition of a prominent light industrial scheme in London.

When complete, the development will provide 29,000 sq ft of industrial space across a 2.3-acre site with work expected to finish in the second half of 2024. The borrower is planning to lease and hold the completed asset while it advances a significant residential-led scheme in the area, which is part of a broader masterplan.

“We are delighted to have worked with Arc & Co to provide the financing for the client,” said Jon Salisbury, Managing Director at Ortus Secured Finance. “The successful financing of this deal is a testament to our team’s ability to navigate complex financing structures and working with Arc & Co, with their impressive track record in introducing high-quality clients, always makes the deal more straightforward. This project is a significant development for the area, and we are confident it will boost the local economy. We are proud to be supporting this project and helping make it to fruition.” 

Ed Horn-Smith, managing director at Arc & Co. said: “Both the borrower and Ortus have considerable experience in this sector, and as such it has been a great experience to work with them on this facility. We look forward to seeing this exciting project progress.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

Ortus Secured Finance is a property finance company based in central London, with offices around the UK. It lends from £100,000 to £25million for terms of up to three years, secured over a wide range of residential and commercial property. Ortus Secured Finance has a strong track record of providing financing for complex development projects, and it is committed to helping businesses achieve their growth goals. 

ARC & CO ARRANGES £16 MILLION DEVELOPMENT FINANCE LOAN FOR BATTERSEA INDUSTRIAL SCHEME

Specialist debt advisor Arc & Co. has arranged a new £16 million facility from Ingenious Real Estate to finance the development of a light industrial scheme in Battersea, south-west London.

The finance has been arranged on behalf of a private developer client at a loan-to-gross-development-value (LTGDV) of 65%.

The developer is constructing 30,000 sq ft of high quality general industrial and last-mile distribution space, following planning permission being secured in May. Work on the scheme is expected to complete in Autumn 2024, at which point the developer will look to lease and hold through refinancing onto a longer-term facility.

The new loan is the second arranged between the two parties. Arc & Co. arranged bridging finance from Ingenious Real Estate to acquire the site in summer 2022, enabling the borrower to benefit from short-term income during the planning process. The bridge was arranged at 70% loan-to-value, with the roll onto development finance at 65% LTGDV releasing equity for further acquisitions.

Cameron Hayes, asset finance advisor at Arc & Co., said: “Ingenious Real Estate is one of the leading specialist funds for speculative commercial developments and was extremely flexible to work with throughout the arrangement of these loans. We look forward to seeing the project built out and working with our client on the refinancing once work has been completed.”

Harry Cloke, Investment Director at Ingenious Real Estate, added: “This is a highly experienced developer and another top introduction from Arc & Co. We are delighted to be continuing the project into the development phase and adding to our ever-growing industrial strategy alongside our more established residential, mixed-use and bridging offering.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO ARRANGES £2.3M DEVELOPMENT LOAN FOR BUCKINGHAMSHIRE HOMES

Specialist debt advisor Arc & Co. has arranged a new £2.34 million development finance package with West One and LDS Sales Guarantees to fund the construction of five luxury homes in Buckinghamshire.

The facility has been provided to a private client of Arc & Co. at an LTV of 70%. West One is the senior lender, with LDS providing a sales guarantee with a 10% cash deposit release to reduce the developers day one equity contribution. The facility was arranged within four weeks of initial enquiry, enabling the client to secure the site in record time.

Oliver Holden, senior broker at Arc & Co., said: “The structure of this facility and the timelines involved made this a complex deal to finalise, but both West One and LDS were excellent to deal with, going above and beyond to complete the package within four weeks of initial enquiry. The borrower is a repeat client of Arc & Co, and we look forward to seeing the completed homes and working with them on future projects.”

Chris Fortune, Relationship Director at LDS, said: “This is our third deal in quick succession with West One as our Sales Guarantee: senior debt combination gains traction across the market. Arc & Co oiled the wheels expertly to enable a quick completion and we look forward to working with Ollie and team again soon.”

Dan Alfano, Senior Portfolio Manager at West One, said: “This was an extremely time sensitive transaction which wouldn’t have been possible without the expert assistance of Arc & Co. We are very pleased to continue building on an established relationship with Arc & Co and LDS and look forward to completing more deals in the future.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO ARRANGES £22 MILLION OAKNORTH BANK LOAN FOR EDINBURGH AIRPORT HAMPTON BY HILTON

Specialist debt advisor Arc & Co. has arranged a new £22 million facility from the neobank for entrepreneurs, by entrepreneurs, OakNorth Bank, secured against the Hampton by Hilton hotel at Edinburgh Airport.

The senior commercial loan has been provided on an interest-only basis.

Due to the hotel’s strong trading performance, the borrower (Ability Hotels) intends on extending the existing 240-bedroom property over a three-phased development adding an additional 380 keys in total. If planning consent is secured, OakNorth Bank will provide the development facility for the works.

Located opposite the main terminal building at Edinburgh Airport, the Hampton by Hilton was constructed in 2018 and provides 240 bedrooms.

Ed Horn-Smith, managing director at Arc & Co., said: “The nature of this arrangement – not only of the initial facility, but also the provision of a subsequent development loan should planning permission be secured – puts a high premium on trust between all parties. Having secured loans from OakNorth Bank in similar situations in the past, we knew they were the ideal funding partners for such a facility, and as such it is hugely pleasing to have reached a solution that works for everyone. We look forward to working with both the client and OakNorth Bank on future projects.”

Damien Hughes, Senior Director of Property Finance at OakNorth Bank, added: “Edinburgh Airport is Scotland's busiest airport and the sixth busiest in the UK, that saw over 11.2 million people travel through it in 2022, up from 3 million in 2021. The Ability Group has built up an excellent reputation for delivering high-quality hotels in areas of high demand, with its Hampton by Hilton site at Edinburgh Airport being the perfect example of this. We were delighted to work with both The Ability Group and Arc & Co. on this transaction and look forward to working with both companies again in the future.”

The Arc & Co. Group is a specialist asset finance advisory company based in Fitzrovia, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO AND LONDON BELGRAVIA GROUP LAUNCH STRATEGIC PARTNERSHIP

Arc & Co. and London Belgravia Group have launched a new strategic partnership to offer clients an integrated advisory service across real estate insurance and finance.

The new strategic partnership will provide independent and impartial advice on real estate finance, equity, structural warranties, performance bonds and general insurance requirements across UK residential and commercial property.

To drive collaboration and further enhance client servicing, the companies will jointly occupy office space at 60-62 Margaret Street, W1W 8TF taking over 5,000 sq ft at the address between them. The shared space will provide a hub where clients can visit to secure comprehensive, best-in-class advice for all of their real estate finance and insurance requirements.

Having worked closely together for some time, the strategic partnership represents a deepening of the relationship between the two firms. By bringing together specialists from across real estate finance and insurance, the new partnership will be able to provide a comprehensive and integrated service, enabling developers to mitigate risk and maintain margins in an increasingly competitive market.

Arc & Co. is a specialist real estate finance advisor – structuring senior debt and equity packages across development, commercial and bridging facilities – while London Belgravia Group provides bespoke insurance and risk management solutions to developers, investors and HNWIs. Combined, the two firms last year advised more than 2,000 clients with development costs in excess of £4 billion.

 Andrew Robinson, CEO of Arc & Co., said: "We are always looking for best in class service providers to ensure our clients’ projects deliver on time and maximise profitability. These types of partnerships allow us to team up with the best in the industry and make use of their extensive experience. We have been working with London Belgravia Group for three years now and have always been impressed by their knowledge and professionalism."

Giles Fallan, CEO of London Belgravia Group, added: “The partnership with Arc & Co. will offer our clients impartial and connected advice in what has become a crowded and potentially overbearing market. With new entrants in both the latent defect and development finance markets, the importance of seeking third party advice is essential. Working with Arc & Co. we have assisted many clients to achieve the strongest and most cost-effective finance and insurance available.”

ARC & CO ARRANGES £16m LOAN WITH TAB

Specialist debt advisor Arc & Co. has arranged a £16 million 1st charge six-month bridging loan with specialist lender TAB. The loan was arranged on behalf of a private client.

The 70% LTV facility is being used to refinance 60 apartments across two buildings in Leeds — one block of student accommodation and a second residential block.

The borrower was facing tight deadlines as its existing lenders' terms were ending. TAB was able to step in to refinance two separate lenders simultaneously on the same day. The loan will facilitate a leasing period ahead of refinancing onto a long-term debt arrangement.

Edward Horn-Smith, managing director at Arc & Co., said: “This was a difficult and complex deal. With mainstream lenders out of the equation, we knew that this called for the expertise of a specialist finance provider. When we search for a finance facility, we look for a deal that works for all the parties, and a lender partner with whom we can collaborate. We found that with TAB. The team impressed us not only with their speed and professionalism but also their tech and their commitment to transparency. TAB went the extra mile to help us structure the debt on behalf of our client, even in these challenging circumstances and we look forward to working with them again in the future.”

Nick Russell, TAB’s sales director, added: “While the ultimate borrower is a seasoned property investor with a strong history of property investments and an extensive property portfolio, this was a complex deal calling for an innovative and proactive approach. Technically, this facility consists of four loans, totalling £16million, across multiple assets for one borrower — it’s a credit to Emmanuel Johnson and the team that we got it over the line so swiftly.”

TAB underwriter Emmanuel Johnson said: “This was the first time I had worked with Ed Horn-Smith on a deal. He was professional and extremely knowledgeable. The client was responsive and quick to provide any information requested. It was a fantastic experience working with Arc & Co and the client to get this completed.”

ARC & CO ARRANGES EUROPEAN FINANCING DEAL

Specialist debt advisor Arc & Co. has arranged a new €8.6m million bridging loan from Interbridge to finance a prime development opportunity in Val d’Isere, France. The loan was arranged on behalf of a Singapore-based HNWI via a Luxembourg Holding Company with French SCI.

The facility – taken out at 60% LTV over a 12-month term – releases equity from two existing chalet properties to fund the acquisition of a parcel of adjoining land, to be marketed for subsequent redevelopment.

Andrew Robinson, CEO of Arc & Co., said: “This was a complex deal with a unique set of circumstances, which called for an innovative and proactive approach. With mainstream local lenders out of the equation, we knew that this called for the expertise of a specialist lender. The team at Interbridge took the time to understand the mechanics of the deal, demonstrated their belief in the exit plan and swiftly executed the deal despite the challenges presented by cross-border transactions”.

Sven Peter, CEO of Interbridge said: The loan use case presented to us by Arc & Co in one of Europe’s premium winter resorts got our attention from the outset. Our know-how in cross jurisdictional lending allowed us to make a quick assessment of the situation and execute this amazing transaction fairly swiftly. Both the borrower and Arc & Co, were exceptionally professional and together the parties delivered a great result”.

The Arc & Co. Group is a specialist asset finance advisory company based in St James’s, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO ARRANGES £5m BRIDGING FACILITY

Specialist debt advisor Arc & Co. has arranged a new £5m million bridging loan from West One to refinance a development opportunity in Tunbridge Wells. The scheme comprises of several residential properties and a vacant grade 2 listed building with potential for development into an assisted living unit.

The facility – taken out for a one-year term - refinances an existing bridge loan and will enable the borrower to market the residential units and the development opportunity after gathering planning.

Tom Berry, asset finance advisor at Arc & Co., said: “As ever, we are pleased to be able to support developers in bringing forward quality opportunities. This new facility – arranged with the ever responsive team at West One – will provide vital short-term working capital and a smooth exit for our client.”

Michael Grant, head of sales – bridging and development finance at West One, added: Working with Tom is very easy, you know what you are getting, key salient points to ensure a smooth process from start to finish, always responsive and pragmatic in his approach to ensure myself and Greg (Senior Underwriter) new exactly where we stood throughout the transaction. Most importantly the customer being front and centre all the way to a successful completion. We look forward to further business from Tom and the wider team at Arc & Co.

The Arc & Co. Group is a specialist asset finance advisory company based in St James’s, London. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, leasing and mortgages.

ARC & CO STRENGTHENS TEAM WITH NEW ASSET FINANCE ADVISOR

Specialist debt advisory Arc & Co. has further strengthened its market-leading capabilities with the recruitment of Dieter Kerschbaumer as an asset finance advisor.

Dieter joins as a chartered quantity surveyor, with more than five years’ experience working on development projects from inception to completion. In his new role, he will be focused on developing strong relationships with lenders to structure the most effective development, commercial and bridging finance solutions for clients.

Based in St James’s, London, The Arc & Co. Group is a specialist asset finance advisory company. Its three divisions – real estate, marine and aviation – allow it to provide specialist advice across a range of financing solutions, including senior debt, equity, mortgages and leasing.

Arc & Co. CEO Andrew Robinson said: “Successful finance advisory is dependent on genuine understanding of the real estate sector, and as such we are always keen to welcome people such as Dieter with ‘on the ground’ expertise. His arrival further strengthens our market-leading team at an exciting time for Arc & Co., and we look forward to mentoring him as his financial expertise grows.”

Dieter Kerschbaumer added: “Arc & Co. is renowned for its in-depth market knowledge, tailored approach and award-winning debt advisory services, and as such it is exciting to be joining the team. Having qualified as a quantity surveyor and played an active part in development schemes, I know just how fundamental the right finance solution is, and I look forward to using this insight to help clients meet their requirements.”

SUSTAINABILITY UPGRADES: WHO IS GOING TO PAY?

A little thought experiment for you: if you had to completely upgrade your home’s energy performance – and face steep fines if you didn’t – would you be confident of finding the cash?

And what if you couldn’t? Re-mortgaging is an option, but only if there was enough equity in the property to borrow more. Maybe a wealthy friend could provide the capital, in return for part ownership of your home of course. But what is the outlay was more than the value of the asset?

A classic Catch-22. It doesn’t make economic sense to spend on the upgrade, but selling the asset would mean a huge discount to current values. You either sell at a big loss or hold an asset that actively costs you money through fines. Hobson’s Choice.

To bring our thought experiment into the real world, this is the situation many commercial investors are currently grappling with, and solutions are in short supply. MEES regulations mean that by 2030 all non-domestic properties must have an EPC rating of ‘B’ or higher; by some estimates, as much as 88% of assets will need some form of upgrade to become compliant. For properties that aren’t upgraded, but continue to be leased to occupiers, fines start at 10% of the property’s rateable value, rising to 20% after three months with an upper limit of £150,000. The urgent need to upgrade is clear, but poses a rather large question: who exactly is going to pay for all this?

Flight to quality

The answer is not a simple one, and in truth it varies hugely depending on each asset’s specific circumstances. But when weighing up a building’s prospects there is a clear distinction to be made between high-quality holdings and those that are at the lower end of the spectrum.

Let’s start at the top end of the market, if only because it’s a little easier to foresee what will happen. In broad terms the best assets – in strong locations with high occupier demand, and usually owned by well-capitalised funds and institutions – will face very few hurdles. Not only will upgrade costs be generally lower as a proportion of overall value, but such works could potentially even have a net positive effect on values. With corporate occupiers willing to pay a premium for sustainable space, and MEES regulations likely to trim supply at the margins, we can expect a fillip to top-end rents and values.

Given these dynamics, finding the cash to upgrade these assets will be relatively straightforward. In many cases the investor will have the money available to fund the necessary works. If needed, loans in this space will be easy to come by – we’re already seeing both banks and alternative lenders expand their offer, with products operating in a similar way to development finance facilities.

At the margins, there will be some assets – on the fringe of the best locations, older and therefore more expensive to bring up to scratch – that require a different solution, and private equity will step in for some of the heavy lifting. A number of major PE funds are manoeuvring to capitalise on this need, with teams identifying the investors that are short of cash but have assets where upgrades make sense. Globally, private equity has $500 billion of ‘dry powder’ in its warchest – expect to see a decent slice of that deployed in upgrading buildings in return for stakes in the assets.

The sums don’t work

Towards the lower tiers of asset quality, the picture is a far more complicated one. Even before availability of cash is taken into account, it is much harder to make the sums add up. These buildings will often be older – needing more spent on them to bring them up to scratch – while at the same time will be worth less than equivalent higher-quality assets. In parallel, these buildings are less likely to see the uplift in rents and values that prime stock will experience; the best many could hope for is for current values to be maintained. The ratio of required spend to asset value is squeezed from both directions, and in many cases it will simply not make sense to undertake the upgrades.

Then there is the question of available capital to complete the works. Owners of lower-grade assets are often far smaller and with a great deal less cash on hand. Many will be owned by individuals and families whose wealth is tied up in other assets, including their own homes. Unlike the institutions, laying hands on the necessary cash to fund the works will be at best tricky and in many situations impossible.

The dynamics effectively rule out borrowing – lenders will have neither the capacity nor appetite to engage with this end of the market – and the doors to private equity funds will be similarly closed. There is, in short, a lot of work that needs to be done, and not enough cash to go around.

The luckier owners will be able to redevelop sites for alternative uses, or sell them to people that can. Others will be stuck with essentially worthless assets. The Government may review the regulations timetable, but this will surely amount to a stay of execution rather than a resolution. One thing is clear: some difficult decisions lie ahead.

This piece was initially published in the May 2023 edition of Business Moneyfacts Magazine.