The team arranged a £10m term loan to refinance a portfolio of three boutique hotels in Argyle Square, Bloomsbury, moments from King’s Cross.
Case Study
Real Estate Advisory arranges £10m term loan for King’s Cross hotel portfolio
A five-year facility refinances three newly refurbished Grade II listed townhouse hotels in Bloomsbury – underwritten on forecast income rather than trading history.
Background
The portfolio comprises three Grade II listed townhouse hotels that have recently undergone a significant refurbishment into a boutique, affordable luxury hospitality offering. The Real Estate Advisory team arranged the original capex facility behind the refurbishment, and the client returned to mandate the team to refinance it. With the works only recently completed, there was very little post-refurbishment trading history in place.
Action
Led by Director Philip Kay, the team secured a lender willing to underwrite the portfolio’s forecast income, rather than wait for a proven track record of occupancy and revenue.
Key features of the facility include:
- A £10m term loan replacing the existing capex facility on the properties
- Structured at 65% LTV over a five-year term
- Underwritten on forecast income, with very little trading history since the refurbishment
- A term designed to see the portfolio through its short-term stabilisation period
- Philip’s second mandate on the portfolio, following the original capex facility
Outcome
The facility gives the client long-term certainty through stabilisation, reflecting lender confidence in the newly repositioned asset and the business plan behind it. Moments from King’s Cross station and the Eurostar terminal at St Pancras International, the portfolio is well placed in one of London’s most sought-after and fastest-changing locations.
What made this deal work was finding a lender who was prepared to underwrite where this business was heading, not just where it stood on day one. There was very little trading history to point to since the capex programme finished, but the lender understood the product, backed the forecast income, and gave us a five-year term that means the client isn’t back at the table again in twelve months’ time.
Key services
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