Coreco Commercial’s Peter Davies recently helped his clients refinance their High Street commercial property to allow redevelopment works to continue, after their existing lender withdrew funding part way through as a result of COVID-19.
The property in question was a commercial property comprising of a ground floor coffee shop and retail unit with office space above. Planning had been granted to convert the office space into six residential flats, along with a progressing application for a further three flats.
However, what made this case more complicated was the fact that Peter’s clients had already commenced the conversion work when COVID prevented their existing lender from funding the remainder of the development. This left the clients in an unfortunate position where without another lender, they were unable to complete the conversion.
The property was part of a wider portfolio and as a result a partial redemption of the existing single facility with the current lender needed to be agreed. However, valuations were required on the wider portfolio of properties and with lockdown measures in effect, this was a lengthy process that took time to get booked in, and subsequently report back on.
It was finally agreed that a facility to repay the existing lender was needed and to what degree. This would then allow the charge over the subject property to be released along with additional funding to complete the conversion. The client had managed to get the additional planning application agreed just prior to completion, therefore Peter was also able to pre-agree an additional drawdown once the initial loan completed.