Office Commercial Mortgages Brighton

Underwriting a Brighton office commercial mortgage

Brighton office stock is unusual. The market is small by national standards and tightly constrained by the South Downs / sea geography, but the occupier base is exceptionally varied for a city of this size, driven by the University of Brighton, University of Sussex, Brighton & Hove City Council, American Express (Amex House, Hove), Legal & General (Hove), Brighton & Sussex University Hospitals NHS Trust, and the Wired Sussex creative cluster. The commercial mortgage market splits four ways. Central CBD professional offices on New Road, Pavilion Buildings and the Queens Road / station district in BN1, the £400K to £3M owner-occupier and small-investment bracket. Creative-led office along Preston Park Avenue (BN1), Plus X Innovation Hub at Preston Barracks (BN2) and the digital cluster anchored by Wired Sussex. Hove BN3 professional services around Norton Road (Hove Town Hall) and the Amex House halo. Suburban and outer office stock in Hollingbury and along the A23 fringe.

Investment underwriting tests ICR at 140 to 155% on let office stock. Tenant covenant carries even more weight than on retail, a five-year unbroken lease to a national professional services firm prices materially better than the same building let on three two-year leases. Multi-let assets with rolling renewals price at the wider end. Owner-occupier office routes through the EBITDA-cover product at 1.3 to 1.5x, the accountancy practice converting from leasehold to a Queens Road freehold, the design studio buying its Preston Park Avenue building, the legal firm taking the freehold of its New Road townhouse.

Creative-led and innovation-hub office at Plus X Preston Barracks is a discrete sub-pool. The University of Brighton-anchored innovation district is a flexible-workspace and incubator model rather than traditional FRI-let office, which changes the underwriting profile materially. Mainstream commercial desks engage where individual units are let to single-tenant covenant occupiers; multi-let serviced or licence-based occupation sits with specialist lenders.

Worked example: a New Road 5,800 sq ft office investment, £1.65M valuation, let on a 7-year FRI to a regional law firm at £115K passing rent. ICR at 145% sizes a £1.05M loan at 64% LTV; Lloyds, NatWest and Santander all price this profile at 7.5 to 8.0% pa on a five-year fix. Worked example two: a Preston Park Avenue creative-services freehold purchase by a small architecture practice, £720K, EBITDA cover 1.4x. Owner-occupier route at 70% LTV places with Allica Bank or Shawbrook at 7.5 to 8.25% pa.

Finance structures for Brighton office

Investment routes via commercial investment mortgage on ICR; owner-occupier via the EBITDA-cover route; vacant or value-add via bridge-to-let with an agreed term-out. Innovation-hub stock with serviced or licence-based occupation routes through specialist desks.

Lender appetite for Brighton office

Strong on prime let stock with national covenants and unexpired lease term over five years. Mid-strength on secondary CBD with mid-covenant tenants on shorter leases. Tighter, but still fundable, on vacant or part-let secondary office routed through bridge-to-let with a credible refurbishment story. <strong>NatWest</strong>, <strong>Lloyds</strong>, <strong>Barclays</strong> and <strong>Santander</strong> compete on prime investment at 7.0 to 7.75% pa for 65% LTV with strong covenants. <strong>Shawbrook</strong>, Allica Bank, HTB and Cambridge & Counties cover mid-market at 7.75 to 8.5% pa. <strong>InterBay Commercial</strong>, <strong>LendInvest</strong> and <strong>Cynergy Bank</strong> handle secondary, short-lease and refurb-to-let stories at 8.25 to 9.25% pa. Plus X / Preston Barracks innovation-district stock with conventional FRI lettings sits on the standard panel; flexible-workspace and licence-occupied buildings route through specialist lenders only.