Cynthia Street and Grays Inn Road - Tier 1 (Phase A)

Investment Summary

Overview – CapitalRise is providing two senior loans to the Borrower. The first is a senior bridge loan against a fully-occupied commercial asset on Cynthia Street, Angel. This will be used to refinance the current long-term debt provider. The second loan will be a senior development loan against 37 Grays Inn Road to refurbish the unoccupied existing building into a mixed-use property with 4 flats and commercial space across the ground floors. Both assets are owned by the same borrower and are fully cross-collateralised to provide a combined loan to GDV (Gross Development Value) of 47% across both assets overall, with an exit LTV of 25% for Tier 1 investors.

Term – This investment will have an estimated term of 24-30 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 (December 2025).

Plan – Cynthia Street continues to be occupied as it is currently, for the whole term of the loan. The bridge loan is being used to increase the security package of the development loan on Grays Inn Road. The development plan is to redevelop an unoccupied and unmodernised building which will be totally refurbished. The basement and ground floor will be commercial space and the first floor through to the third floor will be converted into 3x two-bedroom flats. The fourth floor will be a one-bed flat.

Location – Cynthia Street is located in Angel, and is currently tenanted by a school. The nearest tube stations are Angel, King’s Cross St Pancras which are both 0.4 miles away. Grays Inn Road is in a good quality mixed residential and commercial area of Central London, which is to the south of Kings Cross and to the west of Farringdon. There are extensive amenities readily available within the immediate vicinity with underground services being provided by Holborn and Chancery Lane stations and railway services from Farringdon. The Grays Inn Road asset is located within a small parade of shops with a mix of occupiers.

Your Investment – CapitalRise Tier 1 and Tier 2 investors will benefit from a First Legal Charge over the Properties, Debenture over the Borrower, Assignment over fixed price contracts with the contractors, and Collateral Warranties. Investors in this tier, Tier 1, will always be paid ahead of Tier 2 investors. If the Borrower was unable to repay the loan, CapitalRise could force the sale of the Properties, and would always seek to recover all invested capital and accrued returns on behalf of all investors.

Properties – Cynthia Street is a commercial asset which was a former warehouse and now provides office space across four floors. The building is currently fully tenanted and income-generating. The Grays Inn Road asset comprises a four-storey mid-terrace mixed-use building which has planning permission for extensions to the rear and change of use to provide for self-contained flats and 2 floors of commercial space. The asset is currently uninhabited.

The Borrower – The borrowing entity owns both assets. The owner of the borrowing entity is a non-profit organisation. The organisation uses the asset-owning company to generate income through rental income from the Cynthia Street asset and income will be generated on the sale of the residential flats. A number of the individuals involved in the organisations have undertaken personal property development projects.

Exit Plan – The debt against the Grays Inn Road asset which is being converted to flats will be repaid through the sale of all four of the residential flats and would leave the commercial element remaining for the Borrower to rent out. Alternatively due to the low gearing over both assets, a lender could come in and refinance our debt and provide an investment loan to the borrower.