One of the landmark projects recently funded by Blend Network received coverage in leading real estate publication. In case you missed it, you can read it here: https://bit.ly/3y5ZPId
Read the full story below:
Covid-19 brought enormous challenges for many property developers who had to face the closure of their building sites, delays in supply chains aggravated by Brexit and uncertainty over the housing market outlook. Specialist development finance lender Blend Network – runner-up in the Development Lender of the Year Up to £10m category at this year’s B&C Awards – kept lending throughout the pandemic, even doubling its lending last year[i]. They funded some landmark projects such as the conversion of an old Victorian boot and shoe factory in Northamptonshire, recently flipped from a bridge loan into a development finance facility. Roxana Mohammadian-Molina, Chief Strategy Officer at Blend Network, shares details of how the conversion of this grand Victorian building came together amid an unprecedented year.
We are all too familiar with the challenges that most companies and individuals, including many property developers, have had to face as a result of Covid-19. But amid the ongoing housing crisis, which according to a report by Savills was aggravated by a large reduction in construction capacity last year[ii], the housing market has also seen some positive stories. Here, I share the details of a landmark property development project successfully carried out in the shadow of Covid-19 and amid a very challenging environment of lockdowns and uncertainties.
Back in January 2020, when the words Covid-19, lockdown and social distancing still hadn’t become part of our day-to-day vocabulary, Blend Network agreed to provide a bridge loan to part-finance the acquisition of a grand Victorian boot and shoe factory in Northamptonshire, which had planning to be converted into 24 apartments. The building, on the corner of Mill Road and Strode Road in Wellingborough, is the former Rudlens shoe factory and was built in 1898. As a result of this lending facility, it was being saved from decades of neglect by an innovative property developer whose focus was acquiring off-market sites to build design-led energy efficient homes. The lender was Blend Network, an innovative tech-powered and regulated specialist lender backed by a number of heavy-weight institutional investors, family offices and high net worth individuals. With two very innovative companies coming together, the result could hardly disappoint. The loan was successfully funded in in late-January 2020.
After being taken over by Sudborough & Wood in 1936, the building remained in use as a closing room as late as 1972. As the borrower recently explained in an interview[iii], ‘I had been driving past this beautiful building for 5 years and it had been lying vacant for well over a decade. Every time I drove by, I’d look at it and think ‘oh, I wish one day I could do a project like this’. Eventually, the right team and a bridge loan from Blend Network allowed the developer to acquire the property while they aimed to improve the existing planning consent.
Little did we all know that within weeks of completing on the deal, we were headed into a global pandemic. On 20 March, Prime Minister Boris Johnson announced a national lockdown. In a televised address on 23 March, Mr. Johnson announced new strict rules to slow the spread of the disease which included the immediate closure of construction sites. The months that followed were filled with numerous challenges, yet we were able and pleased to support the borrower throughout the journey. Despite all these challenges, the experienced borrower did a great job securing the site throughout the following months. Furthermore, they worked with the local council to improve the planning and optimise the space amid a global pandemic.
Fast forward 12 months, the developer was ready to commence developing the site. In December 2020 Blend Network agreed to flip the bridge loan into a development finance loan to develop the site. It is now being converted into 24 flats by the award-winning developer.
This success story showcases the significance of lender and borrower working together as a team. The borrower’s values and vision – create sustainable homes which are environmentally conscious – strongly resonated with the lender’s own values and mission – to provide finance with flexible terms and help developers build the homes the country so desperately needs. Daniel Netzer, a lending manager at Blend Network, recently sat down with the developer. Over a heart-warming conversation, the borrower shared how he and his team had overcome the challenges through what had been a difficult year. The conversation between the two captured the essence Blend Network’s lending spirit: a solutions-based lender who works with the borrower as a team, by putting on a developer’s hat, understanding that in the property game unexpected things will always come up and the key is to find appropriate solutions instead of beating up the borrower with a stick. The interview is available to watch[iv].
[i] Blend Network lent just above £10m in 2020 vs. £5m in 2019
[iii] Watch full interview: www.youtube.com/watch?v=netJMhiflbE&t=334s
[iv] Watch full interview: www.youtube.com/watch?v=netJMhiflbE&t=334s