Apache Capital agrees GBP58.5m debt financing with LaSalle on Lexington BTR scheme in Liverpool

Apache Capital Partners (Apache Capital) has secured a new four year GBP58.5 million senior debt facility, with an option to extend for two years, with LaSalle Investment Management (LaSalle).

The senior debt financing, which is secured on The Lexington, Liverpool at Princes Dock, was provided through the LaSalle Residential Finance III (LRF III) fund.
 
Apache Capital and its development partner Moda’s GBP90 million build-to-rent development scheme, The Lexington, will reach practical completion in H2 2021 and represents one of the biggest single investments into Liverpool’s property market over the past few years.
 
This debt for The Lexington builds on Apache Capital’s existing relationship with LaSalle, representing the third debt financing that Apache Capital has closed with them and the third sector, with Apache having loans already secured across student accommodation and senior living.
 
The debt facility was provided by LRF III, a real estate debt venture launched by LaSalle in 2017 that provides real estate debt facilities for the development of residential (for sale or for rental), student housing, hotels and healthcare property in the UK and Continental Europe on behalf of a pension fund client. The LRF programme was established in 2013 and has raised c.GBP850 million and closed 11 debt investments since then.
 
The LaSalle debt follows the announcement, on 11 October 2018, that Apache Capital has formed a new joint venture with Harrison Street Real Estate Capital that, with additional equity investment from National Farmers Union Mutual Insurance Society Limited and Apache Capital, expects to fund the development of up to seven premium build-to-rent schemes across England and Scotland (including Birmingham, Edinburgh, Glasgow, Leeds and London (two schemes)). Together with the new equity investment, the LaSalle debt facility sees Apache Capital secure full funding for the first scheme.
 
The Lexington, the tallest residential landmark in the city’s Liverpool Waters area and one of the city’s largest residential schemes, is a landmark, 34-storey, 325 apartment high specification landmark development scheme that forms part of Peel Group’s GBP5.5 billion Liverpool Waters regeneration masterplan. Designed by Falconer Chester Hall architects, The Lexington will have 15,000 sq ft of dedicated amenity space alongside the apartments, which range from studios to one, two and three-beds. With a gym, roof terrace, garden, fitness studio, an indoor/outdoor cinema, 24-hour concierge and 17th floor residents’ lounge, The Lexington will raise the bar in Liverpool’s rental market. Apache Capital and its development partner Moda continue to work closely with Liverpool City Council and Peel to help support the area’s on-going regeneration while preserving its heritage.
 
Apache Capital and its development partner Moda have created within four years one of the largest UK premium build-to-rent portfolios worth GBP2 billion, today comprising over 6,000 homes across 10 schemes secured in prime city centre locations. Apache Capital and its development partner Moda are continuing to identify and acquire development land to further expand their GBP2 billion build-to-rent portfolio, which will all be financed, operated and held for the long term to ensure the creation of a genuine long-term community and investment platform.
 
Richard Jackson, Co-Founder and Managing Director of Apache Capital Partners, says: “We secured this new GBP58.5 million debt with LaSalle, following strong and growing appetite that we continue to see from international and domestic banks, institutions and funds for our growing build-to-rent portfolio, which is already one of the UK’s largest, worth GBP2 billion with 6,000 apartments.”
 
“Through our Social Infrastructure and Build-To-Rent platforms, Apache is one of the first private investment managers actively owning, developing and operating assets within the alternative sectors. This is our third loan with LaSalle and we now have debt facilities across our BTR, Student and Senior Living sectors, with appetite continuing to grow for our strategy of investing into long term demographic trends.”
 
“This financing, our second build-to-rent asset on which we have secured debt , provides funding diversification and underlines our JV team’s in-house expertise and the superior specification and amenities and services of this landmark scheme.”
 
Dan Pottorff, Managing Director, Debt and Special Situations at LaSalle Investment Management, says: “We are pleased to support Apache Capital and the joint venture on the development of The Lexington, a landmark scheme for the Liverpool market. LaSalle has an established track record of lending against a diverse range of residential, student housing, hotel and healthcare properties through the LRF programme.”
 
“This is the 11th debt investment on behalf of the programme and the 17th development facility arranged by LaSalle since 2013, underscoring our breadth of experience in the development funding market.”