Background

Loan Purpose:

• Refinance a 6-storey mixed office and retail B grade building in the Palmerston North City Centre.
• 60% LVR, interest met month-to-month from client cash flow (not capitalised).
• 3 blue-chip national tenants contribute 30% of the total rental roll and a further 30% of the rent roll coming from other established brands and or government leases.
• Passing rent more than 30% below market rental due to recent vacancies and some larger leases coming up for market rent reviews in the coming 2 years.
• Clients did not want to immediately lease up vacancies as they considered a potential conversion of upper-floor office units into residential apartments.
• Experienced owners with a strong net asset position and strong evidence of servicing capability.