Cheyne Walk, Chelsea

Investment Summary

Overview –  Investors will provide the Borrower with a sales period loan to facilitate the sale of a Grade II listed, end-of-terrace house in Chelsea. The opportunity will fund a mezzanine sales period loan to refinance an existing mezzanine lender and repay a portion of the current senior loan. The senior loan is provided by a bank, and the CapitalRise facility will pay down the upper tier of senior debt which will lower the holding costs of the asset whilst the Borrower looks to sell the property. The Property is located on Cheyne Walk, Chelsea. The Borrower will be paying the interest as it accrues on both the CapitalRise mezzanine loan and the senior bank loan, keeping the LTV consistent throughout the term. Investors will be paid interest on a quarterly basis. 

Term – The estimated term for this investment is 12-18 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 6 months from the end of the estimated term, up until the hard stop date (November 2024).

Location – The Property is located on Cheyne Walk, which is situated on the south-western borders of Chelsea. The Property is on Chelsea Embankment with direct views of the River Thames. The Property is near the local amenities along King’s Road and also benefits from good road connections that lead in and out of Central London. 

Property – The Property is a substantial, five-bedroom, six-storey, Grade II listed end-of-terrace house, which was constructed in the 1700s. The dwelling is spread across six floors including a basement, lower ground, ground and three upper floors equating to 5,854 sq.ft. The Property has extensive leisure facilities, including a cinema room and a 13x6m indoor swimming pool. It also has a good-sized garden to the rear.

The Developer – The Borrower is very experienced and has developed over 15 very high-end homes, and specialises in large and luxurious family homes. They have extended the business to moorings on the Thames. They have over 100 moorings across London and looking to increase this to 250 in the next three years.

Your Investment – CapitalRise investors will benefit from interest being serviced as part of this investment opportunity i.e. interest will not be rolled up and paid at the end. This will be paid to investors on a quarterly basis. CapitalRise investors will also benefit from a Second Legal Charge over the property, a charge over the Borrower’s shares in a company capped to our loan amount. The Borrower is also borrowing in their personal names, giving CapitalRise full recourse over them. This mezzanine loan sits behind the senior lender and in the event of a forced sale of the Property, CapitalRise investors would recover their investment after the senior lender. As we hold the Second Legal Charge, CapitalRise would not be able to force the sale of the house. If a sale is achieved, the value would need to be less than 74% of the current market value of the Property before investors' invested capital is at risk.  

Exit Plan – The Borrower is selling the property on the open market. The Borrower is not allowed to reject an offer at the Red Book valuation or above. If a sale is not completed within the term the Borrower may seek to refinance the CapitalRise debt with another lender.