When our client was offered a cracking off-market development opportunity, they wanted to pounce.
But they didn’t have the cash to pay for a deposit, due to two related problems:
- The client’s working capital was tied up in other development projects, which were suffering from pandemic-induced delays
- The construction lender for those projects wouldn’t agree to a cash release
The client approached us to arrange a short-term funding solution, so the opportunity wouldn’t slip through their fingers.
Given that CPC had arranged the current construction finance on the current projects, we were able to bring in a mezzanine lender into the construction deal during construction.
As a result, we were able to negotiate a partial release of the developer’s project profits six months before completion. This allowed our client to free up enough equity to exchange contracts on the off-market land and negotiate favourable settlement terms to suit their timeframes.
The mezzanine lender was so confident in the strategy that they wanted to talk about rolling their loan into a preferred equity holding within the new project.
Here’s what the client had to say about their experience:
“As CPC arranged our construction loan we turned to them to think outside the box on how we could secure our next site. When we were delayed with COVID last year we realised we needed to move on our next project and contacted Dave with our new site opportunity. He successfully managed to free up enough equity to allow us to transact and keep our development pipeline moving forward. The new mezzanine lender was impressed with the quality of our current projects they want to now partner with us on this next one”.
Legal & Compliance
Crowd Property Capital Pty Ltd (CPC)
A registered company under the Corporations Act 2001, ACN 600 539 544
An accredited member of the Finance Brokers Association of Australia (FBAA) Member No M-352808
A licensed Corporation under the Property, Stock and Business Act 2002, Corporation License No. 10065109.
A member of the Real Estate Institute of NSW (REINSW)
David Lovato (Sole Director) holds a Certificate IV in Finance and Mortgage Broking and Property Services (Real Estate Agents License No 201 604 57 )
