Senior bridge-to-sale financing for a London office campus progressing through a residential-led transformation and conditional disposal.
LMF advised on a senior secured bridge-to-sale financing for a sizeable office campus in London, owned through a property company of a publicly listed European real-estate group. The existing mortgage was approaching maturity while the asset was progressing through a residential-led transformation and a conditional land-sale process.
The financing requirement was therefore not a conventional stabilised-office refinancing. It needed to bridge the borrower from the expiry of the existing mortgage through a defined planning and disposal programme, while preserving sufficient lender protection if the conditional sale did not complete on schedule.
LMF structured and sourced a senior secured bridge facility of ~£40m, with a 12-month initial term and an extension option. The facility was sized against both the asset value and the conditional sale proceeds, with repayment expected from completion of the agreed land sale.
The security package combined a first-ranking mortgage over the property with an assignment of rental income and a pledge over the property-owning company. Parent-level support was incorporated through an interest-payment guarantee and a springing repayment guarantee if the sale had not completed by the agreed backstop date.
The underlying business plan contemplated the conversion of an increasingly obsolete office-led site into a residential-led scheme. A conditional land-sale contract had already been exchanged with a well-capitalised residential developer, subject principally to the planning process. The proposed scheme comprised approximately 500 homes and included a 35% affordable-housing commitment designed to support the planning pathway.
The bridge structure therefore linked credit underwriting to a series of identifiable value and exit milestones: planning progress, expiry of the existing occupational lease, removal of a restrictive covenant and completion of the conditional land sale. The financing also incorporated liquidity protection during the transition period, including an interest reserve and parent support.
LMF advised on facility sizing, bridge-to-sale structuring, lender sourcing, credit positioning and the treatment of planning and disposal risk. The execution process also required coordination of valuation, legal and technical workstreams, negotiation of the security and guarantee package, and lender due diligence through closing.
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