Starwood REIT to Secure $1B+ Debt Package
Proceeds will include a $930 million CMBS loan and a $95 million mezzanine note.
Starwood Real Estate Income Trust will receive a debt package of more than $1 billion for an 8.2 million-square-foot industrial portfolio encompassing 55 assets across five states, according to both Fitch and KBRA credit rating reports.
The financing will include a $930 million CMBS note co-originated by Goldman Sachs, Barclays, Morgan Stanley, Natixis and UBS. Deutsche Bank will serve as trustee, while Trimont and Situs Holdings are expected to be the servicer and special servicer, respectively.
The floating-rate, interest-only CMBS loan bears a two-year maturity date with three one-year extension options. Additional debt will take the form of a $95 million floating-rate mezzanine note issued by JP Morgan.
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Proceeds will cover the $1 billion refinancing of existing debt and provide a $1.6 million reserve for free rent and landlord obligations, as well as the payment of closing costs and the return of $5.2 million in equity to Starwood.
The properties are scattered throughout Nevada (33.9 percent of the portfolio), Arizona (28 percent), Colorado (21.4 percent), Maryland (12 percent) and Tennessee (4.7 percent). In terms of markets, Reno, Nev., includes 16 facilities, followed by Denver (14 facilities) and Phoenix (11 facilities). The rest of the buildings are spread across Baltimore, Las Vegas and Nashville, Tenn.
Shallow bay industrial warehouses comprised more than half of the portfolio, roughly a third consisted of larger distribution centers, while 15.5 percent of the collection encompassed advanced manufacturing properties.
On average, the facilities were 22 years old as of September, while the average leased rate stood at 88.3 percent. The tenant roster included more than 230 unique companies, with notable leaseholders comprising Amazon, FedEx, Sierra Nevada Corp., DHL, and United Parcel Service, among others. About a quarter of the portfolio consisted of single-tenant buildings.
Recent Starwood-affiliated REIT dealings
Starwood Capital Group launched the private, non-traded REIT in 2018, and the trust has since amassed a portfolio of 600 properties with a total asset value of $22.5 billion at the end of July, according to its website.
Yet, Starwood is also affiliated with a publicly traded REIT, dubbed Starwood Property Trust. Two months ago, this trust expanded its portfolio by purchasing Brookfield Asset Management’s Fundamental Income Properties for $2.2 billion. That net lease platform comprised 467 assets totaling 12 million square feet.
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