“This deal underscores how measured structuring and alignment between lender, adviser and sponsor can unlock value even when exit conditions are difficult”
– Arc & Co.
Arc & Co. has arranged a £3.4 million buy-to-let facility from Quantum Mortgages for a developer in Worthing, allowing the retention of part of a larger residential conversion while refinancing existing debt.
The client had initially acquired a former office building in Worthing and converted it into 120 residential flats. The acquisition was financed using bridge and mezzanine funding, which required repayment as the project progressed.
Slower market sales prompted the developer to adjust their strategy. Rather than selling the entire scheme, 16 flats were retained as a build-to-let investment to provide ongoing income.
Of these retained units, eight were already pre-let, generating immediate rental income and reducing letting risk. The developer created a dedicated SPV for the 16 units through new leases and sought a buy-to-let facility to refinance existing debt while maintaining a suitable loan-to-value ratio.
Gareth Briggs (pictured), head of residential UK at Arc & Co., oversaw a revaluation exercise of the retained 16 units, resulting in an updated assessment that supported the required leverage. This was a crucial step in achieving acceptable financing terms given the 74% net LTV.
The transaction allowed the client to fully repay their former bridge and mezzanine lenders, simplify their capital structure, and hold a self-contained 16-unit lettable portfolio ready to generate income as market conditions evolve. The SPV structure isolates exposure and supports efficient long-term management.
“It was a pleasure working with Gareth from start to finish on this deal, whereby the applicant was looking for a guaranteed exit on a large development. As is the case with multiple units involved, there were many moving parts but nothing, through the assistance of the broker, valuer and conveyancer, we could not overcome. Overall, a great outcome for all parties, and I look forward to Quantum and Arc & Co. doing more business in the immediate future,” said Zouhair Mihramane, national account manager, South East & West, Quantum Mortgages.
“This deal underscores how measured structuring and alignment between lender, adviser and sponsor can unlock value even when exit conditions are difficult. Quantum were supportive throughout, and we’re pleased to deliver a solution that balances security and flexibility for our client,” added Arc & Co. in a statement.
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