A consortium of banks led by Morgan Stanley and Barclays has launched a $645.6 million single-borrower commercial mortgage-backed securities deal on behalf of a Blackstone Group fund, a transaction that will refinance an existing mortgage on the portfolio.
The two-year floating-rate mortgage, part of a larger $1.84 billion financing package, is structured as an interest-only loan for Blackstone Real Estate Partners VIII, an affiliate of Blackstone Real Estate. In addition to the $645.6 million securitized loan, there is an additional $1.19 billion of companion debt. There are also two mezzanine loans totaling $480 million which are outside of the trust.
The loan is backed by the fee simple interest in 126 industrial properties, five land parcels, two data centers, two office properties, two parking properties and one retail property, which total 15.7 million square feet located in across nine states. The properties are leased to a diverse pool of 400 tenants, with Amazon representing approximately 12.3 percent of the property’s net rentable area as the largest tenant within the portfolio. The properties were acquired by Blackstone from 2017 to November 2020.
According to a pre-sale report from Fitch Ratings, 59.1 percent of the securitized loan is rated AAA. The loan’s Fitch-stressed debt service coverage ratio and loan to value on the whole loan are 0.64x and 138.7 percent, respectively. When adding the two mezzanine loans, the total DSCR and LTV will float to 0.50x and 174.9 percent, respectively. The whole loan amount of $1.84 billion represents 66.1 percent of the portfolio’s appraised value of $2.8 billion, the report stated.
Proceeds from the $1.84 billion mortgage loan, along with two mezzanine loans totaling $480 million, were used to repay approximately $1.15 billion of existing debt and return $1.13 billion of equity to the sponsor and pay for closing costs.
The deal has concentrations in nine states including California, Florida, Maryland and Nevada. The lease rollover is granular, as 91.5 percent of the portfolio is occupied as of the October 2022, and the remaining average lease term is at about 3.9 years. Cumulative leases representing 63.2 percent of NRA are scheduled to expire through 2027, the fully extended maturity year. The deal is scheduled to close on December 12, 2022.