REIT Closes $95M Loan From Guggenheim for Office Portfolio
Guelda Voien May 9, 2014, 1 p.m.
Guggenheim Commercial Real Estate Finance LLC, on behalf of Midland National Life Insurance Company, provided a $95 million loan secured by three offices assets to a spanking new real estate investment trust, Mortgage Observer Weekly has first learned. The borrower was an affiliate of Maryland-based City Office REIT, Inc.
The publicly traded REIT, a fund of Vancouver-based Second City Capital Partners, began raising capital last month, according to published reports.
The 4.34 percent, seven-year, fixed-rate loan is backed by the 97 percent-leased office portfolio. The buildings include Cherry Creek Campus Center, a 355,687-square-foot asset in Glendale, Colo.; City Center, a 244,079-square-foot asset in St. Petersburg, Fla.; and 3501 Corporate Parkway, a 178,330-square-foot asset located in Center Valley, Pa. The three office complexes total six buildings.
Cushman & Wakefield’s Alex Hernandez, Mark Root and John Spreitzer advised City Office REIT on the deal.
“The lending market was exceptionally receptive to this financing opportunity, highlighting the significant increase in debt capital market liquidity for top-quality assets and sponsors in secondary markets,” Mr. Hernandez, a managing director at C&W, said in a statement provided to Mortgage Observer Weekly.
The REIT had its initial public offering just as the deal closed, in mid-April, according to a representative for C&W. Previous reports say the REIT’s strategy is to focus on secondary markets in which they will not have to compete with well-capitalized institutional investors.
“The successful IPO of City Office REIT, given the lack of other REIT IPO’s this year, is testament to the strength of the management team and the portfolio of properties they have amassed,” said Mr. Root, also a managing director with C&W. “We’re looking forward to working with the CIO team as they grow the new REIT.”
Guggenheim declined to comment on the deal.