It has been a long and difficult journey, to say the least! But yesterday afternoon we finally got the commercial refinance in place for the Huddersfield Zetland House project.
We now have a fantastic group of properties in a ‘cluster style’ student format providing 35 bedrooms, 8 kitchens and 14 bath/shower rooms.
We are immensely proud and feel we can allow ourselves at least a small celebration!
Of course, the work is never over – we need to maintain our standards and improve working practices, becoming a more profitable long term investment.
But finally, 22½ months after starting development work, 25 months after drawing up the initial evaluation documentation, we complete our ‘exit’.
I’m not kidding when I say this is a project I could write a small (no – maybe large) book about, involving;
- before we even started, a problem with an area of ‘no-man’s land’ not on any title deed
- subsequent declining of purchase finance and the deal apparently collapsing a number of times
- eventually negotiating a vendor assisted purchase …
- … utilising an exchange and delayed completion strategy
- requiring an application to be made by the vendor for possessory title of the ‘no-man’s land’ with severe penalties for non-compliance
- raising an initial £400k of development investment
- completely stripping out, knocking about, reconstructing and refurbishing c.5000 sq ft of original hovel HMOs
- in parts, finding the buildings in worse condition than anticipated (and we’d already thought it was really bad)
- so bad in one part we had to remove the entire 40 sq m+ floor and start again
- adding substantial dormers creating 4 bedrooms, 2 bathrooms and a kitchen in unexploited roof space
- negotiating early end of lease to enable commercial conversion of a takeaway and a retail unit
- digging down and excavating to create 5 new rooms, 2 bathrooms and a kitchen from the old beer cellars
- Flood Risk Zone 3 complications
- Planning problems and Planning Consultant issues
- the collapse of the principle Project Director with a major heart rupture on site half way through development
- navigation through the subsequent chaos
- overshoot on delayed completion leading to …
- … seeking emergency 12 month bridging, eventually from a private equity fund
- further raising of finance to meet additional development and some overspend related to delays
- (somehow) managing to hold to onto everything and meeting our target of 35 letting rooms for the student market
- then there’s the whole refinancing process including dealing with low valuations and having to amend company structures to satisfy lenders
- and (as they say) much, much more!
We have continually learned so much, about so many different aspects of property development, JV relationships and raising finance. It has indeed been a rollercoaster ride but the value to our collective education has been invaluable.
So, after jumping from the previous simple Buy-Refurb-Sell project to one involving all of the above on on our very next project – what next!?