RBS Provides $120M in Financing for 1.3 MSF Cold-Storage Portfolio

August 10, 2011
By Barbra Murray, Contributing Editor

Lenders have warmed up to commercial real estate again, even the cold-storage subsector of the industrial market. RBS Securities Inc. has just provided an affiliate of iStar Financial Inc. with $120 million in financing for a 1.3 million square-foot portfolio of refrigerated warehouse space located in seven states. Preferred Freezer Services is the tenant at the facilities.

The portfolio consists of properties located in Atlanta; Boston; Houston; Jacksonville, Fla.; the suburban Washington, D.C. market of Norfolk, Va.; and Elizabeth, N.J., where PFS maintains its headquarters.

RBS, a subsidiary of The Royal Bank of Scotland, supplied the borrower with a 10-year, fixed-rate loan. Commercial real estate services firm CB Richard Ellis orchestrated the debt placement. “RBS took the time and effort to understand the facilities, the PFS tenancy, and they understood the value of iStar’s strong sponsorship,” Greg Greene, a senior vice president with CBRE Capital Markets, said.

Indeed, PFS is a strong tenant. Earlier this year, the company reported that the International Association of Refrigerated Warehouse had recognized it as the fourth largest temperature-controlled warehouse in North America. And the cold-storage subsector is faring well, thanks in no small part to the agriculture industry. According to a report by the U.S. Department of Agriculture’s Agricultural Statistics Service, by the close of the second quarter, the total red meat supplies in freezers had jumped 14 percent, year-over-year, and frozen poultry supplies had increased 8 percent.