Arc & Co. and Quantum complete £3.4m buy-to-let facility for converted apartment development

Arc & Co. has successfully arranged a £3.4 million buy-to-let facility from Quantum Mortgages for a developer in Worthing, enabling the retention of a portion of a larger residential conversion while refinancing the existing debt.

The client originally acquired a former office building in Worthing, converting it into a block of 120 residential flats. The acquisition had initially been financed via bridge and mezzanine funding, which now required repayment.

Amid slower market sales, the developer adopted a revised strategy — retaining 16 of the flats as a build-to-let investment to provide ongoing income rather than selling the entire scheme.

Of the retained units, 8 were pre-let, providing immediate rental income and reducing letting risk. The developer subsequently carved out the 16 units into a dedicated SPV through new leases and sought a BTL facility that would refinance the existing debt while maintaining a suitable LTV

Gareth Briggs, Head of Residential UK, Arc & Co. oversaw a revaluation exercise of the retained 16 units, resulting in an updated assessment that supported the required leverage. This was a crucial step in achieving acceptable financing terms given the 74% Net LTV.

With this transaction, the client has fully repaid their former bridge and mezzanine lenders, simplified their capital stack, and now holds a self-contained 16-unit lettable portfolio ready to generate income as market dynamics evolve. The SPV structure isolates exposure and supports efficient long-term management.

“It was a pleasure working with Gareth from start to finish on this deal, whereby the applicant was looking for a guaranteed exit on a large development.

“As is the case with multiple units involved, there were many moving parts but nothing, through the assistance of the broker, valuer and conveyancer, we could not overcome.

“Overall, a great outcome for all parties, and I look forward to Quantum and Arc & Co. doing more business in the immediate future.”
— Zouhair Mihramane, National Account Manager, South East & West, Quantum Mortgages

“This deal underscores how measured structuring and alignment between lender, adviser and sponsor can unlock value even when exit conditions are difficult. Quantum were supportive throughout, and we’re pleased to deliver a solution that balances security and flexibility for our client.”
— Gareth Briggs, Head of Residential UK, Arc & Co.