PBL143 - J** House, ***** Rd, London, NW5 *** REPAID

17/08/2017

The sale is believed to be going ahead. The buyer is currently negotiating access to the site.

30/08/2017

We have been provided with evidence that a sale is nearing completion as the borrower continues to work towards resolving the road access issue.


Looks like there is philosophical discussion about the meaning of "access".

What road access issue, please?

 

Latest update 15th Sept "The borrower is continuing to work hard to excecute the exit strategy and we are in constant discussions"  Is this Lendy speak for the sale nearing completion has been withdrawn?

Hopefully, when they say 'Exit strategy' they are still talking about the means of access to the site and not yet another loan that looks like going 't1t5 up'.  Does anyone know the story on site access as it seems a little odd that the place could already exist without it?

Maybe a set of translations could be prepared.

The borrower is continuing to work hard to execute the exit strategy and we are in constant discussions.

Translation: This loan looks like it is in trouble because the sale has fallen through but we don't wish to admit it. We have told the borrower we want the loan repaid to help free up our SM and make investors feel happier, but he has no idea of how he might manage this in the near future, if ever.

The loan now only has 2 months to expiry and we are chasing the Borrower for proposals regarding repayment.

Translation: This loan was perhaps ill advised but it seemed like a good idea at the time. The borrower has a comprehensive track record but unfortunately it is not one of getting projects completed. We didn't feel that it was relevant to mention this in the loan particulars.

No change.

Translation: There is nothing new you need to know. And please do not enquire.

We have instructed an Independent Monitoring Surveyor to obtain plans, budget and cashflow forecast, as well as details of professional and contractor appointments and then issue their initial report, which will comment on the proposed development, including planning consent.

Translation: We have to admit that some one or two forum members made a couple of good points (for once) - selling rabbit hutches of 200 squ ft for £160,000 and without parking spaces might not be viable, even in the middle of Norwich. We have passed the matter to our creative design department for their further consideration.

Further prospective purchasers continue to work through their offers which will not be finalised for a few weeks. Upon receipt of these formal offers we will review them, together with those received previously, to determine the best course of action moving forward. 

Translation. We have really no idea if or when these properties will ever be sold. Your guess is as good as ours, or possibly better. But why worry? It's only money. And that doesn't buy happiness. All of you have a wonderful weekend.

see the borrower has now submitted a new planning application on 24 July 2017 which may well take up to 6 months to be determined - why would he do this if the property was to be sold?

Theres a useful set of plans on the application documents, and cross referencing the GF plan with googlestreetview, this property is semi detached to Howdens, with a common block paved area fronting the 2 adjacant loading docks into each unit - bet this is the access issue.

Theres also a document from the architect stating the building has now been internally stripped out pending redevelopment, bottom line is it was bought for £8m, its now been stripped out so vacant and unusable, and theres a planning application pending, while Ly of course have 100% LTV out on it as it was before being stripped out.

This time next year Del.....

My view is that if the sale was still proceeding they would say that and not edit the update. An update saying a sale is progressing well is a lot more upbeat and reassuring than a vague update saying they are working with the borrower on an exit strategy. Therefore my guess (and it's only a guess in the absence of any detail from LY) would be that any sale they were advised about, has fallen through. LY can correct this if it's not the case.

Your 2nd sentence interests me - "I'm not too worried about this loan. Most of the capital should be able to retrieved in the event of a firesale if required."

Have expectations of LY loans fallen so low that the likelihood of recovery of 'most of the capital' is now considered reason not be worried? After all, it's an investment not a charitable donation. What about interest and getting all your capital back? It's marketed as maximum 70% LTV.

If not losing much of an investment starts to feel like a satisfactory outcome then we may as well all give up now.

Not digging at you, just making an observation about the general mood.