Bixby Capital Lands $142M Loan for 2 MSF Portfolio
JLL Capital Markets arranged the financing.
Bixby Capital Management has refinanced an industrial and office portfolio spanning 2.2 million square feet near key ports in Southern and Northern California, Florida, Georgia and Texas. JLL Capital Markets arranged the 10-year, $142 million fixed-rate loan from PGIM Real Estate.
Eight properties in the portfolio are Class A industrial assets with an average vintage of 2014. A 46,182-square-foot office property in Irvine, Calif., was also included in the financing.
The JLL debt advisory team working on behalf of the borrower was led by Capital Markets President Kevin MacKenzie, Senior Managing Director & Industrial Co-Lead Brian Torp and Director Spencer Seibring.
“There was strong interest from the insurance companies for this well-diversified, Class A, stabilized portfolio,” Torp told Commercial Property Executive.
READ ALSO: Industrial Real Estate’s Future Depends on Adaptability
The facilities feature clear heights ranging from 28 to 36 feet and ample dock doors. They are fully leased to 13 tenants representing various industries, including consumer goods, home improvement and third-party logistics.
Refinancing portfolios brings economies of scale
Bundling multiple buildings into a single loan portfolio finance has many advantages with few disadvantages, according to Ivan Kustic, vice president at MetroGroup Realty Finance.
“The obvious advantages for the lenders are economies of scale as larger building owners with substantial portfolios typically have institutional-quality assets that are well maintained,” Kustic said. “The borrower is well-capitalized and a dominant landlord in the market. A large amount of capital can be deployed in one transaction. The loan request is typically lower leverage.”
There are advantages for the borrower as well. According to Kustic, the lender usually allows the borrower to substitute assets in and out of the credit facility.
“The larger portfolio multi-asset loans generally receive more favorable pricing. Borrowers are dealing with one institution in originating the loan as well as ongoing servicing interactions,” Kustic explained.
He added that the difficulty in assembling multiple assets for a single credit facility is matching multiple portfolio assets to lenders’ preferred criteria. Capital sources have very specific preferences in their security, such as size, use, age, configuration and demographics. Not all buildings offered in portfolio finance often fit the lender’s lending criteria.
Bixby, PGIM expand portfolios
Two weeks ago, in the Orange County market, PGIM Real Estate worked to remain the sole owner of Bella Terra, a lifestyle center of more than 1 million square feet in Huntington Beach, Calif.
DJM Capital Partners and PGIM purchased the asset in 2015 for $100 million, and DJM subsequently sold its ownership interest.
In October, Bixby Capital Management purchased a Class A industrial portfolio from Huntington Industrial Partners. The Mesquite, Texas, three-building collection totals 533,632 square feet.
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