Our client is a successful family owned builder-developer company with over 25 years experience. The company has historically focused on building duplex, townhouse and small walk-up unit blocks. Part of the transition from father to son in business continuation saw the son take a more ambitious approach to their growth strategy to explore medium density apartment developments.
The project at Mays Hill Sydney was to be their biggest project to date with 27 units over 5 floors and a double level basement to be developed and built by the client.
There were a number of critical issues that needed to be solved before financing of this particular project could be secured:
First things first, we ran the project through our in-house feasibility and financing models and determined that the project would be very profitable if we could get the structure and financing right.
With that box ticked, we sat down with the client to make sure we understood all facets of the project including:
Once we were comfortable that we knew as much about the project as the developer himself, it was time to structure the deal to address the key concerns which we knew the bank would have and put our best foot forward.
Our expectation was this was a tough deal to present to the banks, in fact, 3 out of the 4 majors basically laughed at us when we pitched the deal to them. Not to be deterred, we approached the last bank knowing we had a bankable deal that made commercial sense.
We started getting traction after being put in touch with an ex-institutional banker who could see the merit in our project and structure. After months of back and forth and various frustrating calls with bankers and credit analysts, we finally reached a deal with the bank that satisfied both the client’s requirements and the bank’s credit policies.
The finalised loan terms included:
We managed to mitigate most of the risks that prevented this deal from being bankable with a major tier 1 bank:
People laughed at us and told us “good luck” when we told them we are going to get this deal done. We bank the unbankables.