Arc & Co. has arranged a £17.64m development loan from Downing LLP to fund the acquisition and refurbishment of an office building in Brighton.
The scheme will see the property upgraded to a CAT-A specification, with new mechanical and electrical systems designed to achieve an EPC A rating and a BREEAM Excellent score.
The project is intended to deliver best-in-class office space in a city where demand remains strong and supply of new Grade A stock is limited.
Tenant interest has already been high due to the building’s location and the scarcity of comparable space in the market. The transaction moved quickly, with a site visit in March and a tight deadline to secure the acquisition.
Downing added VAT to the facility, removing the need for a separate VAT loan and simplifying the structure.
Dieter Kershbaumer, asset finance advisor at Arc & Co., said: “This was a landmark asset with obvious potential, especially given the shortage of new Grade A stock in the market, so it was important to explore all approaches to get this exceptional deal structured.
“The client is a specialist permitted developer, and this was their first office development. My background as a quantity surveyor meant that I was able to communicate to the funders that the scope of works was well within their capability.
“The developer was extremely versatile, and their proactive approach was instrumental in maintaining momentum. Downing were excellent throughout the process; Will Powell played a significant role in getting the deal across the line.”
Will Powell, investment director at Downing, added: “Having known and worked with the team at Arc & Co. for over 10 years now, it was great to complete on such a specialist transaction for an excellent client in the sector.
“The deal involved a number of complexities not concurrent with a typical funding arrangement and the team involved exhibited first class capability in getting it done.
“Against a backdrop of sustained market challenges, this deal went against the grain, and it is a pleasure to be involved.”
