I recently advised on a particularly complex refinancing case involving two commercial properties in London with a combined value of £11 million. The clients were looking to refinance existing bridging finance that had been secured against the properties.
The clients were directors of a Delaware-based Limited Liability Company (LLC), through which the properties were held. While this structure can offer flexibility for international investors, it can also create additional considerations when seeking UK property finance.
The clients’ existing bridging facility had become expensive and they wanted to refinance onto longer-term commercial finance. However, the ownership structure made the application more difficult, and several lenders were unable to accommodate the proposed arrangement.
There was an additional challenge with one of the properties, which was vacant at the time of the application. The building had previously been used by the clients as an office, meaning there was no current commercial lease in place. This further reduced the number of lenders willing to consider the case.
OUR SOLUTION
Given the international ownership structure and vacant property, I knew that a conventional lender was unlikely to provide the flexibility required. I therefore approached an international lender with experience of assessing more complex cross-border property structures.
The strength of the underlying assets was an important factor in the lender’s assessment. They were also prepared to consider the vacant property on a vacant possession basis, overcoming one of the key obstacles in the application.
The lender ultimately agreed to provide the required commercial refinancing, allowing the clients to refinance their existing bridging facility against the two properties.
The case demonstrates why commercial property finance can require a more tailored approach when ownership structures, international borrowers and vacant assets are involved. It also highlights the importance of working with lenders experienced in international transactions.
For borrowers looking to refinance international bridging finance, specialist lender access can be particularly valuable where a conventional UK lender is unable to accommodate the proposed structure.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Property and other assets used as security may be repossessed if repayments are not maintained. Property values can fall as well as rise.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
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Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
