Case Study: £9,450,000 Loan for Purchase of Properties in Central London

17 March 2016

Completion of a Short Term Loan (STL) on the Bank’s STL2 product, at a gross LTV of 70%.

This sizeable Short Term Loan case was completed with Shawbrook Strategic Partner Buchler Barnett Spencer, on a product designed for mixed use properties.

The broker’s client is a property investment vehicle with a large portfolio and a strong track record in property redevelopment in the residential sector. The hard work of the broker and the expertise of the Shawbrook teams led to the case proceeding from offer being issued to full completion in just 15 business days.

Buchler Barnett Spencer is a structured finance advisory business based in Mayfair, London. The core of their business is arranging and structuring senior debt finance for property investment and development projects. Whether financing new acquisitions or refinancing existing projects, they are active across all sectors of the property market and have completed transactions as small as £1 million and as large as £250 million. Their team has almost 90 years of combined property experience and has collectively financed over £7 billion worth of transactions.

The loan was primarily used to fund the purchase of the properties, which incorporated a hotel, several apartments and a large House of Multiple Occupancy (HMO). Shawbrook’s valuer partners at Appraisers UK were instructed and despite not being able to access all of the properties, were able to value the majority and then make a considered judgement as to the total value based upon their findings and access to additional documentation. Shawbrook takes a pragmatic, case-by-case approach to each individual loan and customer, a personal style which the lender demands from all its business partners.

Moreover, this personal style is demonstrated by the fact that, although the broker’s client had no existing loans with Shawbrook, they were able to visit Deputy CEO and Managing Director of Commercial Mortgages Stephen Johnson at Shawbrook HQ, to ensure that the Bank was the right fit for the client’s plans.

Shawbrook’s Credit team discussed the loan during the first week of January 2016, and the offer was sanctioned on 8th January. An additional layer of complexity stemmed from the offshore structure of the broker’s client, which included two separate entities registered in the British Virgin Islands and the Marshall Islands respectively. Although this was not an issue in itself, the Shawbrook lending teams had to proactively seek the necessary legal opinions from the relevant jurisdictions, to ensure the Bank could proceed with comfort.

Any planning issues were similarly mitigated by Pure Law, Shawbrook’s on-site legal team meeting with the borrower’s solicitors, gaining adequate reassurance that the properties could evidence established use. All significant queries were answered and Shawbrook was able to complete on 29th January.

The broker, Westley Richards from Buchler Barnett Spencer, commented:

“As a long-time Strategic Partner with Shawbrook, I’ve completed on numerous short term cases with the Bank. This has to rank as one of the most demanding, and reaching such a positive outcome for my client wouldn’t have been possible if it wasn’t for the determined day-to-day work put in by the lending team for this case.

“The interaction between Pure Law and my client’s solicitors in regards to the planning issues was thorough and exacting, with a professional approach taken by all parties resulting in a satisfactory conclusion.”