Gresham Businesses
Property Capital Financing
Following the success of its four previous mezzanine/preferred equity property funds, Gresham Property established its first unitranche fund in 2015 to provide the Australian property market with a “stretch senior” finance product for development and investment opportunities. Stretch Senior funding is available across all stages of a property development life cycle or investment period.
Gresham has three active funds with over $3.25 billion of capital raised, having closed its seventh fund in early 2020 in the midst of the COVID pandemic and its eighth fund in mid-2021.
Construction Financing
GPF No. 8 Fund (“GPF8”) is primarily designed to provide unitranche debt facilities to property developers and investors to fund construction projects. GPF8 can provide a single source of capital for developers and investors which traditionally would only be available through a combination of senior plus mezzanine debt. Alternatively, GPF8 can provide senior debt leverage with more flexible terms, such as presale coverage.
GPF8’s competitive advantages include:
- Scale – most banks will need to syndicate transaction exceeding ~$100m, whereas GPF8 can hold much larger exposures, with $700m being largest loan provided to date (un-syndicated)
- Structure – getting comfortable with complex arrangements and security structures
- Speed – provide timely feedback and prompt execution
- Certainty – we value long term clients and do not engage in “bait and switch”
- Leverage – provide higher leverage than a borrower will be able to achieve from their typical bank.
From a borrower’s perspective, having a single source of capital for their projects removes a significant amount of transaction complexity and uncertainty and the requirement to negotiate with both a senior and junior lender, and agree terms of an intercreditor deed.
GPF8 is not designed to compete with bank financing and where bank financing alone can be achieved, GPF8’s offering would not be competitive. GPF8 is active Australia wide, focusing on major metropolitan areas and can be used to fund all property asset classes.
Commercial Real Estate Financing
GPF No. 7 Fund (“GPF7”) is primarily designed to target loans which are more challenging for major bank lenders to provide. Opportunities include loans secured by residential stock held for rent or sale, commercial properties which have a short WALE, or incomplete leasing profiles. GPF7 typically provides higher leverage than the banks are willing to provide and also has the ability to provide subordinated loans.
GPF7 is active Australia wide, focusing on major metropolitan areas and can be used to fund all property asset classes.
A selection of investments includes:
Sydney
Property Type: Residential
Investment: Stretch Senior loan
Project Size: 372 apartments
Total project realisations: $203 million
Sydney
Property Type: Residential
Investment: Stretch Senior loan
Project Size: 7 luxury apartments
Total project realisations: $68 million
Melbourne
Property Type: Residential
Investment: Stretch Senior loan
Project Size: 59 Townhouse lots, 31 House & Land lots and 39 Land lots
Total project realisations: $153 million
Sydney
Property Type: Mixed-use
Investment: Stretch Senior loan
Project Size: 104 apartments and 900sqm of retail/commercial space
Total project realisations: $164 million