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MEZZANINE FUNDING - RESIDENTIAL APARTMENTS

CapitalGroup invested by way of a mezzanine loan into an apartment development to the North West of Auckland. On completion the project will comprise four distinct buildings of up to five levels which will house a total of 60 residential apartments and eight ground floor retail tenancies.

CapitalGroup invested for the following reasons:

  • The Developer had a strong track record with CapitalGroup.
  • Resource consent was held and there was a strong consultant and construction delivery team engaged.
  • The site was well located and supported by recent investment in public infrastructure.
  • An acceptable level of unconditional apartment presales were in place, thus demonstrating the market’s acceptance of the product and providing a contracted source of partial repayment.

CapitalGroup worked with the bank senior lender for this project to ensure that the two debt facilities were complementary. We also arranged a small number of standby apartment sales (or underwrites) to assist the developer to meet its presales threshold and enable commencement of the development prior to an anticipated escalation in construction pricing.

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