Arc & Co. has arranged a £5.5 million commercial refinance for a retail and upper-parts property on New Bond Street in central London. The transaction was structured through the commercial real estate division of a private bank at 33% loan-to-value, with pricing set at 2.20% over SONIA.
The deal, led by director Philip Kay, formed part of a refinancing exercise across two assets for a multi-generational investor with holdings in central London commercial property. The borrower was moving away from an existing lender that had shifted its focus towards institutional lending.
Structural challenges
The transaction encountered complications when the lender’s banking permissions prevented it from providing financing to an individual borrower. While an initial proposal involved creating a special purpose vehicle, the property was ultimately transferred into a limited liability partnership to enable the lender to proceed.
The property, despite its New Bond Street location, is single-let and supported by what was described as a relatively weak covenant. The borrower’s low leverage position and credit profile were factors in advancing the deal.
Pricing and lender selection
The transaction proceeded below the lender’s typical minimum deal size of £10 million. The lender was selected based on its relationship-driven approach and direct access to senior decision-makers, according to Arc & Co.
Kay said the borrower’s ownership structure initially created obstacles, but working through credit approval early allowed for a solution that met both parties’ requirements. He noted that access to senior decision-makers at the lending institution was a factor in completing the transaction.
The deal represents a case where low-leverage borrowers with long-term property holdings navigate changing lender strategies in the central London commercial property market.
