Since 2009, Dorado has provided over $450 million in finance to 139 projects across five States.

First
Mortgage

First Mortgage

Case No 1

A developer was finalising a development application for an integrated medical facility and childcare centre.

Dorado Property property finance funding, development finance case study

Victoria, Australia

As the developer had a relatively limited track record and was yet to secure any pre-sales for the medical facility, senior bank funding was not a viable option to assist with the settlement of the site in an outer suburb of Melbourne.

Dorado undertook a review of the project and, being located within a key growth corridor which has seen both considerable population growth and residential development in recent years, recognised its potential. Following our comprehensive due diligence process, Dorado assessed the project’s viability and drew upon our previous funding experience within the healthcare and childcare sectors to provide first mortgage funding to the developer.

This enabled the developer to settle the site. They have since progressed the development application and are currently seeking tenders from builders for the project’s construction.

First Mortgage

Case No 2

A property investor was planning to establish biodiversity stewardships over several rural land lots.

Dorado Property property finance, development finance case study

New South Wales, Australia

Following the settlement of these land facilities, the investor intended to amalgamate the land parcels into larger lots and establish biodiversity stewardships over the new sites. This would allow the generation of biodiversity offset credits, which the investor could then sell in the market to those with offset responsibilities (e.g. property developers and government entities).

Banks would only assess the transaction under traditional ‘landbanking’ criteria, which meant interest could not be capitalised, gearing was reduced, and no account was paid for any proceeds of biocredit sales. On the other hand, Dorado did value these biocredits’ potential, and after a thorough review of the appropriate environmental legislation and feasibility of the investor’s strategy, we provided a first mortgage funding solution secured over the rural lots to establish the biodiversity stewardships.

First Mortgage

Case No 3

A joint venture group had equally provided funding to acquire a site for the development of 12 two-bedroom apartments.

Dorado Property property finance, development funding case study

With approvals obtained and a builder secured, the bank were unwilling to provide a construction facility as the joint venture structure meant that ultimately the equity funders were retaining the completed apartments, as opposed to obtaining conventional arms-length pre-sales. The bank therefore deemed the structure unconventional.

Dorado saw the merit of both the development and also the joint venture structure, with each participant being of sound financial standing. In an effort to commence construction without further delay, Dorado provided an initial facility that incorporated a review period where if, with the benefit of time, the developer had secured a major bank to fund the balance of construction, Dorado would be refinanced. Each of the joint venture participants successfully repaid the Dorado facility and took ownership of their completed apartment.

First Mortgage

Case No 4

A developer had completed the construction of 195 apartments. Prior to this approximately 150 apartments were pre-sold leaving the remaining 45 apartments unsold.

Dorado Property property finance funding, development finance case study

The developer was able to repay the majority of their construction facility with the existing pre-sales, however several of these pre-sales were to FIRB approved buyers and would require additional time to complete settlement. Further to this the developer was wanting release part of their equity within the unsold apartments to complete the purchase of a new project site.

Dorado provided a first mortgage funding solution secured over the unsettled and unsold apartments. Proceeds from the Dorado loan went toward repaying the remaining balance of the construction loan and to the developer to purchase the new project site. The Dorado facility remained whilst the developer marketed and sold the remaining apartments.

Mezzanine
Debt

Mezzanine Debt

Case No 5

A leading Brisbane based developer was undertaking the construction of a townhouse project in an outer suburb of Brisbane.

Dorado Property property finance, development funding case study

Queensland, Australia

The project’s appointed builder had recently gone into administration and the developer was focusing upon securing a replacement. The developer required a mezzanine facility to continue the construction of the townhouse. Despite the additional risk associated with the need to engage a new head contractor, Dorado were confident that this could be achieved without any material increase in construction costs given that on-site works had yet to commence.

After successfully completing our detailed due diligence process, Dorado agreed to provide a mezzanine funding solution, whereby funds were drawn contemporaneously with the financial close of the senior debt facility and the execution of a fixed-price contract with the new builder.

Mezzanine Debt

Case No 6

A developer had begun construction of 148 apartments with ground level retail.

Dorado Property property finance, development finance case study

Early works to the first floor of the building were partially completed before the project’s builder was replaced following a building licence issue. Concurrently, the developer was finalising a senior construction loan and seeking to refinance the existing land facility.

Following a detailed review of the project, and confident in the developer’s track record, Dorado provided a mezzanine debt facility. This enabled the developer to refinance the existing land loan and facilitated the settlement of the senior construction loan.

Preferred/Structured
Equity

Preferred/Structured Equity

Case No 7

A rapidly expanding developer builder had a number of medium size apartment projects at various stages of completion.

Dorado Property property finance, development funding case study

This was stretching the availability of equity funds that the developer was required to contribute to any new project. Further, as the developer was also the builder, banks specified that any non-bank funding would need to be ‘equity-like’ rather than debt. This was prohibiting the commencement of their next 40 apartment and three commercial unit development.

Dorado provided a funding solution in the form of preference equity. The documentation and structure was satisfactory to the senior bank. In this instance, the Dorado equity and fixed return was in preference to the developer’s equity. This enabled the developer to undertake the project and grow its business.

Preferred/Structured Equity

Case No 8

Dorado was approached by a highly regarded boutique fund management firm specialising in real estate investment opportunities to provide a cornerstone preferred equity position in the development of an integrated healthcare facility in Brisbane’s middle ring.

Dorado Property property finance, preferred equity funding case study

Queensland, Australia

Dorado recognised the merit in partnering with a highly experienced group with a strong track record in the delivery, lease-up, and sale of commercial property assets.
We undertook extensive due diligence of the proposed project and were satisfied that existing supply constraints within the area in tandem with the area’s continuing population growth would support strong underlying demand for medical space in the centre.

Dorado’s early equity commitment enabled the developer to focus their efforts upon securing senior construction funding for the project, additional pre-leases to meet the senior funder’s pre-lease hurdle, and execution of the construction contract.

Preferred/Structured Equity

Case No 9

An established developer builder held a contract to purchase three development projects with a combined yield of 196 land lots.

Dorado Property property finance, income asset funding case study

The equity funds were for settlement of the land and civil construction for an equity profit return, whereby the developer went on to construct the homes for the buyers of the land lots. The developer had raised a portion of the required equity from a large real estate group and was seeking to raise the balance through a partner who could offer more than just funding, but also willing to provide their expertise at project control group meetings.

Dorado assessed the projects’ profitability together with the developer’s experience in delivering similar projects and the other funding parties involved. Dorado then committed the balance of the equity funding required to see the project fully funded to completion.

Preferred/Structured Equity

Case No 10

A newly established buy-and-hold syndicator purchased two large commercial buildings in its first year of operation.

Dorado Property property finance, income asset funding case study

They had been working to acquire a third asset, a neighbourhood shopping centre, and had been speaking to other investment houses to assist in the equity requirement to diversify their investor base. Approaching settlement, a substantial investor withdrew their interest for internal reasons, jeopardising the whole transaction.

Within a very tight timeframe Dorado was able to commit to taking the position of the withdrawn substantial investor, without any alterations to the existing structure. Funds were delivered several days later and this enabled the settlement to occur on time with no penalty.