Since 2009, Dorado has provided over $300 million in finance to 117 projects across five States.

First
Mortgage

First Mortgage

Case No 1

A developer spent a considerable amount of time identifying an apartment site within an established suburb.

The site was a former council park and, despite their efforts, the developer was unable to secure development approval prior to settlement. Considering the combination of a development site that had no passing income, and no development approvals, obtaining senior bank funding to acquire the site was not possible.

Dorado focused its review on the viability of the proposed development, and at short notice, delivered a facility for the land settlement that provided a net amount of 65% of the land value, with all interest capitalised. The developer was then able to obtain the appropriate development approvals, complete a pre-sales campaign, and secure a builder. Dorado was then refinanced by a major bank who provided the construction facility.

First Mortgage

Case No 2

An experienced land developer owned a development project, which since 2007 had an approval for a 23 land lot subdivision.

With market conditions improving, the developer approached the major bank already funding the site to provide a larger facility to fund the civil works to create the 23 lots. After a prolonged period, the bank declined to provide further funding. Faced with terms expiring on a keenly priced civils contract, and missing the sale of the 23 lots in a strong market, the developer was seeking an immediate solution.

By reviewing the surrounding market, and recognising the merit of the well-priced civils program, Dorado refinanced the existing major bank facility and immediately went on to fund the civils program. Dorado also assisted the developer’s pre-sales program by introducing them to well-suited sales agents. The lots were completed on time with all 23 pre-sold lots settling, with Dorado being repaid from initial settlements, and the developer collecting the balance of proceeds.

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.

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.

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 commercial developer had secured a site on the fringe of an established suburb.

The proposal was for a mix of commercial tenancies with residential apartments. The developer had spent a significant amount of time creating value and ‘earning’ equity prior to settlement, including securing the site at a discount to market and obtaining necessary development approvals. Regardless, the senior bank required further cash funding from the developer to proceed with settlement and commence construction.

Focussing on the developer’s track-record, complete feasibility, and recognising the value of the ‘earned’ developer equity, Dorado provided a mezzanine debt facility. The facility had two parts, one to support the project through the settlement stage, and the second to fund the construction stage. As the developer was able to lessen the cash equity contribution to the project, they were also able to progress a second project during the same time period.

Mezzanine Debt

Case No 6

A developer in a very active market was two-thirds through the construction of a 72 apartment and two commercial unit project.

The construction program was on time and the senior bank was providing progress payments as scheduled. At the same time another apartment site that the developer was familiar with was placed on the market for sale. In order to purchase the new site, the developer needed an early release of his committed equity capital from his already underway project.

After a prompt review of the underway project, Dorado proposed a mezzanine debt facility solution. The quantum of this facility matched the amount the developer was seeking to purchase the new apartment development site. Dorado worked with the senior bank to support the developer’s strategy. The developer then purchased the new apartment development site, maximising returns across the two projects.

Preferred
Equity

Preferred Equity

Case No 7

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

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 Equity

Case No 8

A developer secured a large development project with equity funding and once settled was looking to maximise the apartment yield by applying for a new development approval with 30 more apartments.

This proved successful, however the developer was faced with the requirement to contribute further equity to proceed. This was difficult considering previous communications to the equity syndicate, however, the developer was keen to progress the larger development approval.

Dorado promptly provided the required funding shortfall in the form of preference equity with a modest underlying fixed return, and then a profit share component once the existing equity was paid to the same return. This solution allowed the developer to benefit from managing a larger project and the equity shared in a larger profit margin.

Equity

Equity

Case No 9

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

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.

Equity

Case No 10

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

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.