ATLANTA — Cushman & Wakefield Sonnenblick Goldman’s Atlanta office has arranged $100 million in acquisition debt financing for 12 Class A industrial assets totaling 4.5 million square feet, located in South Carolina, Georgia, Florida, Indiana, Texas and California.
A partnership between AREA Property Partners and DW Management acquired the portfolio in an off-market transaction for approximately $170 million, purchased via the $759 million AREA Value Enhancement Fund 7. The loan is secured by ten assets comprising 3.5 million square feet.
Pattillo Investment Partners, LLC, sold the properties, which are 87 percent occupied with average remaining lease terms of about 5 years with little near-term rollover. According to Cushman & Wakefield Sonnenblick Goldman, the lease terms allow the buyer both stable cashflow and revenue opportunities.
AREA Property Partners is also seeking additional value-add industrial acquisitions. Including this deal, AREA has invested $510 million in various property types.
“We’ve been impressed with the depth of the market and strong demand from lenders in the industrial sector,” said Steve Wolf, partner, and head of portfolio management and U.S. Value Enhancement Funds for AREA Property Partners. “The ability to structure a loan with a single lender that allowed for a combination of fixed rate and floating rate proceeds allowed us the flexibility that was instrumental to our business plan. Furthermore, the loan bears a blended interest rate below 4.0 percent, which is extremely accretive to our cash-on-cash return.”
The Cushman & Wakefield Sonnenblick Goldman team that advised the partnership includes Mike Ryan, Managing Director, Brian Linnihan, Senior Director, and Jeff Walker, Associate.
“The market continues to price core assets very aggressively,” said Ryan. “A year ago, debt spreads for a deal like this would have been priced 200 basis points higher, with only a few lenders interested in a $100 million loan. Today, we’re seeing interest from a variety of sources, including debt funds, life companies, conduit lenders and banks at competitive rates.”
— Dan Marcec