Office Properties Income Trust Secures $77M in Mortgage Loans

22330 Glen Drive. Image courtesy of CommercialEdge

Office Properties Income Trust, one of the nation’s largest owners and operators of office space, has closed on $77.4 million in mortgage loans for three properties totaling 478,475 square feet in New Jersey, Virginia and California.

The financings are the latest developments resulting from a previously announced merger between the REIT and Diversified Healthcare Trust, expected to take place in the third quarter of 2023.

All of the properties are owned and operated by OPI’s asset manager, The RMR Group, according to CommercialEdge information.

In-depth financing endeavors

Princeton South Corporate Center. Image courtesy of CommercialEdge

The loans are subject to all-in fixed interest rates over five to 10-year interest-only payment terms and range from 7.3 percent to 8.2 percent. The characteristics of the financing resemble those of other properties financed as part of the merger, where OPI intends to gain better lending terms for the assets, rather than drawing on existing bridge loan facilities. The financing deals comprise:

• A $42.7 million mortgage with an 8.2 percent fixed interest rate over a five-year interest only-term, secured for Princeton South Corporate Center, a 250,000-square-foot Class A office complex located at 500 Charles Ewing Blvd. in Ewing, N.J. Princeton South Corporate Center was built in 2013, and was acquired by the owner in January of 2015 for $74 million, according to CommercialEdge information. The property’s sole tenant is consumer goods giant Church & Dwight, the same source shows.
• A $26.3 million mortgage, accompanied by an 8.1 percent all-in fixed interest rate set over another five-year interest-only term for 22330 Glen Drive, a 167,000-square-foot Class A office asset in Sterling, Va., a submarket of Washington, D.C. Built in 2016, the property is fully leased to the U.S. General Services Administration and the U.S. Customs and Border Protection.
• An $8.4 million mortgage, accompanied by a 7.3 percent interest rate, coupled with a 10-year interest-only term, for 145 Rio Robles Drive, a 58,000-square-foot property in San Jose, Calif. The class B property was built in 1985, and picked up by The RMR Group in December of 2013 for $13.5 million, according to CommercialEdge data. Situated in Silicon Valley, 145 Rio Robles Drive is flanked by offices used by the likes of Google, Samsung, Cisco and SK Hynix.

The merger’s other moves

145 Rio Robles Drive. Image courtesy of CommercialEdge

When completed, the merger between OPI and DHC will lead to a combined portfolio of $12.4 billion, with properties located in 40 states. As part of the merger, Office Properties Income Trust worked to obtain a $368 million bridge loan commitment from JPMorgan Chase Bank.

READ ALSO: What the New Wave of M&As Means for CRE

So far, the firm has closed on more than $108 million in mortgage loans for properties to be absorbed by the merger. In May, OPI worked to ink $30.7 million for a 266,000-square-foot office property in Landover, Md. The non-recourse 10-year CMBS loan is subject to an all-in fixed interest rate of 7.21 percent.