The company owned a B-Grade commercial office tower in South Melbourne valued at $95m with a weighted average lease expiry (WALE) of nil years. The property was subject to a first ($115m) and second ($30m) ranking mortgage – the total secured debt of $145m with a net asset deficiency of $50m and other loan covenant defaults.

Due to the deed of priority between the mortgagees, the company could not secure funding for building enhancement works / CAPEX and lease incentives to reposition the property, retain and attract premium tenants on long-term leases and increase the property value before a global sale & marketing campaign.

We proposed and successfully conducted a Receivership appointment strategy that included:

• borrowing $32m in priority to the existing secured debt
• engaging and managing the building works
• resigning ANZ national call centre and BMW Australia
• signing Mondelez Kraft, ADCO Constructions, Wilson Parking
• preparing operational, cost-to-complete, loan facilities cashflows
• obtaining a valuation and conducting a sale of the property
• providing legal, insurance, and taxation strategies that provided significant value upside

We sold the property fully leased with an increased gross rent on a WALE of 5 years, NABERS increased to 3.5, and building rating increased to Prime Grade for $167m.