Arc & Co. has completed a £5.5m commercial refinance for a retail and upper-parts property on New Bond Street, with the deal led by Philip Kay, director at Arc & Co.
The loan was arranged through the commercial real estate division of a private bank at a leverage of 33% LTV, priced at 2.20% over SONIA. The refinancing formed part of a wider exercise across two assets, with the client engaging Arc & Co. to secure competitive pricing and a high level of service from a new funding partner.
The borrower is a multi-generational, buy-and-hold investor with longstanding exposure to Central London commercial property. They were refinancing away from an existing provider, which had shifted its strategy towards more institutional lending and became less suitable for their needs.
A key challenge arose when the lender could not provide financing to an individual borrower under its existing banking permissions. An initial proposal to create a new SPV was considered, but Philip ultimately structured a transfer of the property into an LLP, allowing the lender to proceed while meeting the client’s broader objectives.
Although the asset benefits from a prime New Bond Street location, it is single-let and supported by a relatively weak covenant. Philip’s experience with similar assets, combined with the borrower’s low leverage and strong credit profile, was instrumental in advancing the transaction.
Pricing was a critical factor for the client. Philip focused on securing full credit approval first, before optimising commercial terms, ultimately achieving a margin aligned with the borrower’s requirements.
The lender was chosen for its relationship-driven approach and ability to provide direct access to senior decision-makers, a core client requirement. Using Arc & Co.’s long-standing relationship with the head of real estate, Philip secured support for a sub-£10m transaction, even though this fell below the lender’s typical deal size. The funder took a long-term view of the borrower’s profile and potential, with Arc & Co. among a small number of broker firms trusted to introduce such opportunities.
Philip Kay (pictured) said, “This was a great example of where experience, lender relationships, and structuring creativity all came together. The borrower was high quality, lowly levered, and had owned Central London assets for decades, but the ownership structure initially became a blocker.
“By taking the deal through credit early and working closely with the lender, we were able to find a solution that worked for both sides and then drive pricing down to where the client needed it to be. Access to senior decision-makers was key, and this funder proved to be a strong long-term fit.”
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