The Scenario

The developer approached Optimus Capital seeking an urgent mezzanine facility of $6m to partially amortise the first mortgage, fund holding costs, and pre-construction costs for 6 months to allow the developer additional time to rationalise the cost of construction which had escalated by $40m and secure pre-sales to satisfy the conditions precedent of the incoming senior construction financier.

The Security

The development accommodates a range of uses comprising 359 apartments, a market hall and other retail tenancies, dining venues, a boutique hotel, a 200-seat theatre and an upper-level skate park. Stage 1 comprises two buildings of 9 and 12 storeys accommodating ground floor retail, first floor office and co-working spaces and a total of 150 apartments.  Stage 2 comprises four buildings; three 12 storey and one 6 storey buildings in addition to a repurposed heritage building.

The Result

Optimus Capital successfully negotiated terms with a preferred capital partner, securing a mezzanine loan facility of $6M. This facility allowed the client to amortise the first mortgage and provide capital for pre-construction costs, notably costs associated with sales and marketing, negotiating the construction contract and holding costs. Remarkably, financial close was achieved during the first week of January, a time when most businesses are typically closed for the holiday season.