Lending Query
A student accommodation management company specializing in Purpose-Built Student Accommodation (PBSA) across the UK approached Silver Oak Capital seeking assistance in acquiring a new PBSA building in Birmingham. They required a long-term commercial mortgage at 70% loan to value (LTV).
Client Circumstances
The borrower had a successful track record in managing PBSA properties across various university cities in the UK. They targeted buildings with high student demand and proximity to universities, often requiring modern amenities and facilities. With a proven history of successful PBSA management, the borrower inspired confidence in potential lenders. They aimed to complete the purchase with cash but required immediate access to a loan post-acquisition.
Problems to Solve
Primary challenges in this case included addressing potential issues related to optimizing student accommodation space and amenities to meet evolving student needs and preferences. Additionally, ensuring compliance with student housing regulations and safety standards posed a unique challenge requiring specialized legal and technical expertise.
Solution Provided
We presented a tailored solution from a reputable Birmingham-based lender, specifically crafted to address the client’s needs:
- Loan Amount: £12 million GBP
- Loan to Value: 70%
- Interest Rate: 2.50% + Bank Base Rate
- Term: 10 years
- Repayment Structure: Interest-Only
- Bank Fee: 1.75% This solution not only met the client’s challenging circumstances but also incorporated provisions for optimizing the student living experience and ensuring compliance with regulatory requirements, thereby enhancing the long-term attractiveness and profitability of the PBSA investment.