Equus Secures $718M Refi for Phoenix Industrial Portfolio
The five-year floating-rate package features a $527.1 million CMBS SASB loan.
Affiliates of Equus Capital Partners have secured $718.2 million in financing to refinance a 52-property, 5.2 million-square-foot shallow bay industrial portfolio across metro Phoenix. The transaction represents one of the largest industrial portfolio financings in the Phoenix market, according to JLL.
The five-year floating-rate package was arranged by JLL Capital Markets and includes a $527.1 million CMBS SASB execution with Morgan Stanley as lead left and Bank of America as right lead, along with a $191.1 million balance sheet component through Bank of America.
The JLL Capital Markets team was led by President Kevin MacKenzie and Senior Director Jason Carlos, along with Associate Frank Choumas.
Known as the Project Pegasus Industrial Portfolio, the light industrial portfolio includes approximately 1,260 suites located throughout the West Valley North, West Valley South, Airport, Deer Valley, Chandler, Mesa and Tempe submarkets. The portfolio was 92 percent leased at closing to a diverse tenant base spanning manufacturing, logistics, distribution, construction, machinery, professional services, consumer products and technology industries.
The shallow-bay configurations are designed to serve small and midsize businesses. The buildings range from approximately 29,000 square feet to nearly 259,000 square feet. The properties feature average clear heights of 20 feet, flexible suite layouts, loading capabilities and infill locations. The portfolio’s average vintage is 1992, with assets located in both established business parks and newer industrial developments constructed as recently as 2019.
The portfolio’s assets benefit from their locations near Phoenix’s major transportation infrastructure, including Interstates 10 and 17, U.S. Route 60 and the Loop 101, Loop 202 and Loop 303 freeway system. The Project Pegasus Industrial Portfolio also has proximity to Phoenix Sky Harbor International Airport, Phoenix-Mesa Gateway Airport and key regional distribution corridors connecting Southern California, Nevada, Utah, Colorado and Texas.
Closer look at one of the portfolio’s assets
The eight-building 241,282-square-foot Peoria Crossings Commerce Center at 8550 N. 91st St. in Peoria, Ariz., is one of the assets in the portfolio. The flex industrial park, completed in 2004, is less than 1 mile from the Loop 101 freeway.
Located on 20.25 acres, the property has a 40-foot by 70-foot truck court and 555 parking spaces. The property’s buildings have a maximum clear height of 18 feet. Each building has 12 grade-level doors.
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The property has 25 percent office buildout. Tenants include Sunrise Auto Care, SafePro Auto Glass, Toyowest Automotive, Ship my Cards, Arizona Flooring Wholesale Center, National Youth Sports, Taylor Equipment and Event Rental and Extra Electrical, according to Yardi Matrix.
Equus’ portfolio investment history
Peoria Crossings was part of a 7.3 million-square-foot, 74-asset portfolio acquired by Equus in October 2021 from Reliance Management for nearly $1.2 billion, Yardi Matrix reported. The purchase was made through sponsored value-added funds and a consortium of strategic co-investment partners. The same source shows that the portfolio became subject to an $805.9 million CMBS loan originated by JPMorgan Chase, with DBR Investments and Morgan Stanley also issuing the debt.
Since 2021, Equus has divested some of the properties within the portfolio. Late last month, Equus sold a 14-property portfolio spanning 1.3 million square feet in Tucson, Ariz., for $165.8 million to Everview Partners and Catalyst Real Estate. It was the largest industrial sale on record and largest commercial real estate sale by square footage in the Tucson MSA since 2007, according to Cushman & Wakefield | PICOR.
Last year, the firm sold an 889,352-square-foot collection in metro Phoenix to BKM Capital Partners and Kayne Anderson Real Estate for $167.9 million. The eight-property small-bay light industrial portfolio in the Airport and Tempe submarkets had 364 units in 41 buildings.
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