CALMEZ - Specialists in Residential Development Funding and Development Loans
Residential development funding has been extremely difficult to source since the banking crisis of 2007/8.In the decade prior to 2007, High Street Banks were traditionally funding 50% of the site cost and 100% of the construction cost which frequently represented 70% - 80% of the total residential development funding required for a project.
CALMEZ and other Mezzanine funders would assist in financing builders and property developers with development loans. This became known as Mezzanine funding.
On occasions this Mez zanine funding provided the full shortfall of residential development funding for a particular development, i.e. the developers were lent up to 100% of the total development loan.
This highly geared mix of senior debt and Mez funding (which equated to the total residential development funding required) was created to enable the Developers to utilise their own funds for the acquisition of new sites without having to wait for earlier projects to complete.
Following the banking crisis and the ensuing recession, which saw residential property value fall by 20% to 30%, the High Street Banks have largely withdrawn from the residential development funding market. - a few of the High Street Banks are currently testing the residential development funding market by offering to fund up to a maximum of 60% (but typically) 55% of the total residential development loans.
This leaves property builders and developers to find 40% - 45% of the residential development funding at a time where a large proportion of developers are struggling to keep their property development businesses alive!
The growth of two specialist property banks together with mezzanine funders (including CALMEZ) are now between them, able to offer selected developers up to 90% of the required residential development funding in an attempt to re-establish the property market by providing residential development loans essentially required for this recovery! required for this recovery!
Property Development Funding Specialists
020 8959 3626