Arranged construction finance to successfully completed Commercial Property Development

Arranged construction finance to successfully completed Commercial Property Development

Woolworths Medowie, NSW

Issues

• Major shareholder came into financial distress during the project, significant works completed on site
• Bank perceived that shareholder put the development company at risk and therefore ceased funding
• Numerous contractors were unpaid
• Anchor tenant’s deadline unable to be met, reluctant to extend Agreement to Lease terms

Development Finance Partner’s scope

• Negotiate Agreement to Lease extensions with Anchor Tenant (vital for the project to be feasible)
• Arrange highly-geared alternative funding to complete, with a lender who would not negatively perceive the shareholder/developer
• New construction funding to include payment to unpaid contractors for existing works.

Results

• 6 month delay to delivery date negotiated with Anchor Tenant
• Arranged funding to complete, including payment to contractors for existing works, at very high gearing level of 83% of on-completion value
• Project successfully completed.

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