Commercial Development Purchase Secured By ‘Nearly Complete’ Warehouse Project
Scenario
The borrowers have extensive experience in the concrete industry and are established commercial property developers. This facility was arranged to fund the purchase of a vacant commercial block in an industrial and retail estate in Williamstown North, Victoria.
The loan was secured against another substantial commercial property in Ravenhall, Victoria comprising 24 brand-new warehouses, ranging in size from 102sqm to 532sqm, with construction 95% complete.
Why PMA?
The borrowers were unable to secure traditional bank finance, however, conditional approval had been granted by a major lender contingent on the completion of the warehouse project.
PMA Solution
PMA was able to lend against the nearly complete warehouse project and provided the borrower with a prepaid interest term of 6 months with the option for 6 monthly extensions.
Details
Amount: $1,650,000.00 (First Mortgage)
Property Value: $6,550,000
LVR: 33.59%
Term: 6 months prepaid plus 6 monthly extensions
Broker Commission*: $27,225
*with no clawback
Exit
The exit strategy was to refinance the loan with a traditional lender once the warehouse project was complete and the borrower is in a stronger financial position.
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