Brookland Role
Sourced a unique and high profile special situations investment in the City of London, successfully won a highly contested bid for the asset and arranged equity from LRC and debt (loan-on-loan) from Chenavari to complete the acquisition.
Transaction Background
The Royal Mint Court Estate, former home of the Royal Mint, comprised circa 450,000 sq ft offices in a 5.5 acre campus site in the City of London. The owner had defaulted on its debt and the special servicer had appointed insolvency administrators and agents to sell the property. The property was held under a geared long lease and the freeholder was keen to acquire the long leasehold with a view to combining the 2 parts in order to create a substantial redevelopment opportunity.
Result Achieved
- We developed and executed a winning strategy to secure the asset, despite a highly competitive and aggressive bidding process. We ran the entire bid process and negotiated with the special servicer, the insolvency administrators, the agents and their legal advisers. It was a complex structure as the underlying loan had been securitised as part of a CMBS transaction.
- Sourced equity and arranged the debt on a loan secured on a long leasehold with a hostile freeholder and an estate which was predominantly vacant due to the redevelopment opportunity.
- Strategic and innovative thinking: Due to the risk of the freeholder not granting consent to assign the long lease we persuaded the special servicer to sell the loan instead of the asset and had to convince the special servicer’s lawyers that their client had the power to actually transact in that manner. Having won the bidding process, we still had to deal with an unusual last minute bid from the freeholder presented by the sales agent even though they had chosen not to take part in the bidding process. Administration was also extended which made it difficult for the freeholder to forfeit the long lease.
- Post completion the equity providers, LRC and the freeholder agreed a JV and ultimately sold the site to the Chinese Government for them to develop it into the new Chinese Embassy.
- This proved to be one of the most successful loan-to-own transactions in the current real estate cycle.
