Blackstone to Secure $1.6B Industrial Loan

Blackstone will receive a $1.6 billion refinancing package for a 94-property industrial portfolio spanning 14.7 million square feet throughout seven states, according to reports by KBRA and credit rating agency Fitch. Newmark appraised the portfolio at nearly $2.5 billion.

The debt includes a $1.4 billion CMBS loan—originated and sold by Bank of America, Goldman Sachs, JP Morgan, Morgan Stanley, Natixis and Wells Fargo—and a $175 million mezzanine loan.

The two-year, floating-rate, interest-only CMBS note has three extension options of one year. It features payments based on SOFR plus an assumed spread of 1.95 percent with an expected strike rate of 4.74 percent.

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The company will use the proceeds to refinance $1.51 billion of existing debt, recapitalize $21 million of unencumbered properties, pay closing costs and keep $46 million. Notably, 84 of the assets securitized by this loan were part of another, larger collection that backed a $1.8 billion package in 2022.

Blackstone’s portfolio consists of properties with an average age of 36 years. Roughly 72 percent of the assets cater to producers, importers and exporters, as well as wholesalers, while 14 percent may be utilized as distribution centers.

The tenant roster consists of more than 275 distinct companies, which brought the portfolio’s leased rate to 90.3 percent in October—20 basis points below its average annual occupancy rate. A subsidiary of Constellation Brands leases 9.4 percent of the total space, paying 19.2 percent of total annual rent.

California warehouses attract more debt

Western industrial properties make up most of Blackstone’s portfolio. A total of 8.8 million square feet were in California, followed by Nevada (1.8 million square feet), Florida (1.4 million), Illinois (1.2 million). Maryland, Pennsylvania and New Jersey each had under 1 million square feet.

Properties in the Inland Empire will receive the largest debt share—nearly $415 million. Sacramento, Calif., is next in line with $255 million, followed by Reno, Nev., ($238 million) and Tampa, Fla. ($101 million).

Blackstone will allocate $366.6 million toward Palmer’s Oak Logistics Center in Jurupa Valley, Calif. The 2 million-square-foot campus has two fully leased buildings that debuted last year. The firm will also set aside $101.3 million for the Tampa Distribution Center in Florida, a 955,000-square-foot, six-building property.