One of our long-standing clients Gary Morton at Morton Group Ltd approached ourselves to assist in raising finance to purchase the former Council Offices known as Prospect House in the Northumberland market town of Hexham. The long-term vision that Gary and his Team had for this site was to develop the Listed Building into residential properties consisting on a town house, four cottages and eleven apartments.
As a result of the development having no planning permission for a residential development it restricted the number of lenders that would provide funding at the required loan to value. We therefore introduced Gary to into one of our equity partners. This partner was prepared to lend funds on a short-term basis to allow the purchase of the site. Thus, enabling our clients to then complete the planning application and obtain planning approval for their development.
Prior to planning permission being granted we had discussions with Development Finance Lenders and Joint Venture Partners about refinancing the site and providing ongoing development finance. Several development finance lenders were interested in supporting the scheme. However, on this occasion our clients decided to work with a Joint Venture Partner.
There are pro’s and con’s to working with a joint venture partner and it’s vitally important that all parties feel that they can work together on a project. On this occasion the partnership was a good fit as the JV Partner loved the property and location; liked the Morton Group Management Team; and the scheme was also commercially viable for all involved.
Upon planning permission being granted the JV Partner introduced their finance allowing the removal of the equity partner and redevelopment to commence.
We all look forward to seeing this completed development.