Arc & Co secures £7.3m acquisition and stabilisation facility for multi-let Glasgow office

Philip Kay, Director at specialist debt and equity advisory firm Arc & Co., has successfully arranged a £7,322,500 acquisition and stabilisation loan for a multi-let office building in central Glasgow.

The three-year facility was expertly structured to support both the initial acquisition and subsequent asset management initiatives.

The deal presented unique challenges due to the property's characteristics— specifically a sub-one-year WAULT. Usually, such short lease structures would attract bridge financing at significantly higher rates until the income has stabilised.

However, Philip recognised that the entry price—reflecting the high net initial yield—provided a sufficient buffer to service the debt even if some tenants exercised break clauses or leases expired.

He ensured that a strong underlying position was established with the lender, combined with a comprehensive asset management strategy, which allowed him to secure long-term stabilisation funding rather than expensive bridging finance.

Philip identified a lender that specialised in competitive stabilisation funding and understood both the building's excellent central Glasgow location and the client's value-add business plan.

In addition, the sponsor’s JV equity partner is a large established New York developer which underlines the return of appetite from US equity investors in the UK regional office market.

The loan was delivered at an LTV of 67.5% with a market-leading margin of 4.25% over three years—a particularly competitive margin considering the short WAULT on a regional office property and the leverage against purchase price.

Philip commented, "This case demonstrates the value of identifying lenders who truly understand both the asset and the borrower's strategy.

“The lender’s appreciation of the building's fundamentals and the sponsor's track record enabled us to secure stabilisation funding where others might have only been able to offer bridging terms."

Arc & Co. continues to actively finance a variety of projects across the UK, leveraging its expertise to deliver bespoke solutions for clients navigating evolving market conditions.