Bank provides finance to help buyer take office development off its hands
Benson Elliot has forward purchased a prime Barcelona office investment with stapled finance from Banco Sabadell. Antic Cami de Valencia is a 20,000m2, three-building complex with a projected €80m end value and will be developed by Banco Sabadell’s real estate arm, Solvia. Benson Elliot managing partner Marc Mogull said: “Securing long-term development finance in Spain today is somewhere between challenging and impossible.
“It would not have been possible to get a deal like this done at a price anywhere close to the bank’s objectives without a stapled financing package.” He added that the leverage ratio on the 10-year plus debt “would not be inconsistent with what we would expect in stable market conditions”. Last year Benson Elliot and local partner Urban Input entered talks with Banco Sabadell to restructure its position and move the project forward, after Solvia took control of the asset in 2009. The previous borrower had defaulted on a loan from the bank.
Benson Elliot secured the deal for Benson Elliot Real Estate Partners III and the joint venture will acquire the completed buildings from Solvia in early 2013. The scheme is expected to be the only major office project completed in Barcelona’s central business district in that year. “The deal was attractive to us because in all the markets we operate in there is enormous demand for core assets and almost a gulf in interest to look at anything else,” said Mogull.
“We have the ability to create a core asset in a major European market at a time when little, if any, product will be delivered, at a price we think enables us to be extremely competitive.” The group is in talks with Banco Sabadell and other banks in Spain and expects to make further investments there this month. In the UK last month, Benson Elliot arranged a new five-year, £12.4m loan with Santander on the CBXII office in Milton Keynes, after completing the leasing of the whole 150,000 sq ft building, letting 30,000 sq ft of office space in two deals and all the empty shops. Benson Elliot Real Estate Partners II bought the building in March 2010.