Successful exit: Splaiul Independentei 294, Romania

Splaiul Independentei 294 offered investors an opportunity to participate in the financing of the acquisition of two land plots located on Splaiul Independentei, District 6, Bucharest. This land will be used for the development of a residential project of 220 apartments. 

The Sponsor requested financing from Crowdestate for the remaining price difference of EUR 1.1 million, in addition to what they have already paid in a comfortable 41% LTV split (related with the price paid) and 31% LTV (related with the market value). 

We managed to raise EUR 890,000 in the available time before the deadline of the acquisition contract and made the final payment in due time. The loan was secured with 1st rank mortgage on the land & future constructions.

The Sponsor had another financing option, but it was conditioned to obtaining the construction authorization, which was not issued till June 2020. After analyzing the authorization documents & process up to the financing point, we decided to make this investment proposition to our Investors, as we considered the authorization risk as manageable against the market value of the land mortgaged. 

Project’s main details:

• Loan amount: EUR 890,000;
• Investment period: 12 months;
• Interest rate: 15% p.a., paid monthly;
• Expected IRR: 15.77% p.a.;
• Secured by 1st rank mortgage.

The construction authorization was obtained on June 30th, 2020. 

Due to the pandemics, the Sponsor didn’t start the construction of the project immediately. 

In November, the land & project was sold to another company for a price 60% higher versus the price paid. The first tranche of the price – EUR 890,000 – was paid to cover the Crowdestate loan and reimburse our Lenders, as it happened on December 4th. 

The final IRR of the project was 16.06% p.a. 

We want to thank all Splaiul Independentei 294 investors who made this project possible. We are so proud to have you on board!