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 developer will upgrade the property to a CAT-A specification, aiming for an Energy Performance Certificate (EPC) A rating and a BREEAM Excellent score.
The project will see improvements to the building’s mechanical and electrical systems.
The office is in a supply-constrained market with strong demand for Grade A space and limited new stock available. Tenant interest has been high due to the location.
Downing included the VAT in the facility, avoiding the need for a separate VAT loan and simplifying the structure and timing.
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.”
Kershbaumer added: “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, said: “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.”
