Arc & Co secures Glasgow multi-let office £7.3m acquisition and stabilisation facility

The three-year facility was arranged by Philip Kay, director at specialist debt and equity advisory firm (pictured above), and was structured to support both the initial acquisition and subsequent asset management initiatives.

The loan was delivered at an LTV of 67.5% with a margin of 4.25% over three years.

The deal presented challenges due to the property's characteristics — specifically a sub-one-year WAULT. with short lease structures risking the attraction of bridge financing at higher rates until the income has stabilised.

However, Philip recognised that the entry price — reflecting the high net initial yield — and provided a buffer to service the debt.

He ensured that an underlying position was established with the lender, combined with a comprehensive asset management strategy, allowing a long-term stabilisation funding to be secured rather than bridging finance.

Philip commented, "This case demonstrates the value of identifying lenders who truly understand both the asset and the borrower's strategy.

“The lender’s appreciation of the building's fundamentals and the sponsor's track record enabled us to secure stabilisation funding where others might have only been able to offer bridging terms."