2-in-1 Mortgage for Commercial Assets with Unusual Lease Agreement

The Situation

Finance was required to support the acquisition of two semi-commercial properties from a receiver, with the client needing a lender that could move decisively within a relatively tight timeframe. The properties were both let to the same commercial tenant, a bakery, and the tenancy covered both properties rather than being split into separate ASTs. One of the properties also lacked separate access to the residential unit, which added another layer of complexity to the deal.

These factors meant the transaction sat outside the credit appetite of many commercial lenders, despite the underlying strength of the asset. The case therefore needed a lender willing to look beyond standard criteria.

The Solution

West One were able to assess the structure of the transaction properly and recognise the property dynamics involved. Rather than focusing only on the elements that made the case unconventional, they structured and underwrote a commercial mortgage of £411,775 (just less than 75% gross LTV) against the properties valued at £550,000 and accommodated the deal within our commercial lending criteria to provide a workable funding solution.

The valuation and legal processes progressed smoothly, helped by the fact that there was some time pressure from the receivers and everyone involved was keen to keep the transaction moving. With clear coordination between all parties, the purchase was successfully completed without unnecessary delay.

The Benefit

By securing the funding through West One, the client was able to proceed with a strategic portfolio acquisition that many lenders would not have supported. The deal enabled them to acquire two income-producing semi-commercial assets in one transaction.