Our client recently sought financing against a property he owned in central Italy. He was a European real estate investor for many years, and all his other assets were already leveraged, leaving this asset the only one unleveraged. This property, situated in a highly desirable location within central Italy, was purchased a few years back for about 7,000,000 EURO. As an investment asset, the property was rented for various purposes, including holidays, events, and exhibitions.
The client's objective was to leverage this asset to facilitate the acquisition of additional real estate. He had already entered into a sales agreement on other assets he owned and was meant to close in the next couple of months, which would provide the exit for the bridge. Due to stringent regulations and bureaucratic processes, the Italian market proved challenging to find a bridge.
Enness identified a lender willing to finance approximately 50% of the asset's value in two tranches. The loan term was for one year, with the option for an extension for an additional year. Considering he was looking to repay the loan in a couple of months, we agreed that the early repayment penalty applied solely for the initial months of the loan. The interest rate of approx. 1% rendered this financing option more cost-effective than alternative lenders, quoting rates ranging from 1.15% to 1.5%. The entire execution process was completed within a couple of weeks.
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