Mezzanine Funding – Residential Apartments
CapitalGroup provided mezzanine finance for the development of 100 apartments (reduced to 99 when 2 apartments were amalgamated) at a prominent location in Mt Eden. The project was commencing when the environment was challenging from both a construction and bank funding perspective. This required CapitalGroup to work closely with the developer and a local trading bank to put a structure in place which appropriately mitigated the delivery risks. The structure allowed a high leverage transaction with CaptialGroup providing a mezzanine loan.
CaptialGroup invested in the transaction due to the following aspects:
- The development team had a strong track record of delivering projects.
- The high quality apartment development in a desirable location.
- A construction contract with an experienced and capable contractor who carried design risk for the project.
- An acceptable level of presales being in place.