Arc & Co. has completed a £5.5m refinance of a retail and upper parts asset on New Bond Street, with the transaction led by Philip Kay, director at the firm.
The loan was arranged with the commercial real estate division of a private bank at 33% LTV and priced at 2.20% over SONIA.
The facility formed part of a wider refinancing exercise across two assets, with the borrower seeking competitive pricing and a new funding relationship.
The client is described as a multi-generational, buy-and-hold investor with long-standing exposure to Central London commercial real estate. The refinance marked a move away from an existing provider, which had shifted towards a more institutional lending model.
A complication emerged during the credit process when it became apparent that the lender was unable to advance funds to an individual borrower on commercial property under its current banking permissions.
An initial proposal to introduce a special purpose vehicle was considered, before the property was ultimately transferred into an LLP structure to satisfy the lender’s requirements while maintaining the client’s broader objectives.
Although the property benefits from a prime New Bond Street location, it is single-let with what was described as a relatively weak covenant. The borrower’s low leverage and credit profile were factors in securing lender support.
Pricing was a key priority for the client. According to Arc & Co, the approach taken was to secure full credit approval before negotiating commercial terms, resulting in a margin aligned with the borrower’s requirements.
The lender was selected for its relationship-led approach and ability to provide direct access to senior decision-makers.
Arc & Co said its existing relationship with the lender’s head of real estate enabled it to secure backing for a sub-£10m transaction, below the bank’s typical deal size.
Commenting on the transaction, Philip Kay (pictured) said: “This was a great example of where experience, lender relationships, and structuring creativity all came together.
“The borrower was high quality, lowly levered, and had owned Central London assets for decades, but the ownership structure initially became a blocker.
“By taking the deal through credit early and working closely with the lender, we were able to find a solution that worked for both sides and then drive pricing down to where the client needed it to be.
“Access to senior decision-makers was key, and this funder proved to be a strong long-term fit.”
Arc & Co said the deal underlines its ability to address complex ownership structures and place lower-leverage Central London assets with relationship-driven lenders willing to take a longer-term view.
