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Press Release
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Contact: Nick Derasmo (212.841.7505) |
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Cushman & Wakefield Sonnenblick Goldman Arranges Financing
For AREA Property Partners Industrial Portfolio Acquisition |
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Tuesday, May 31, 2011
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Atlanta, GA
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Cushman & Wakefield Sonnenblick Goldman’s Atlanta office announced today that it has arranged $100 million of acquisition debt financing on behalf of a partnership between AREA Property Partners and DW Management. The partnership purchased 12 Class A industrial assets totaling 4.5 million square feet in an off-market transaction for approximately $170 million from Pattillo Investment Partners, LLC. The 12 assets are located in South Carolina, Georgia, Florida, Indiana, Texas, Kentucky and California. The loan is secured by ten assets comprising 3.5 million square feet.
The portfolio is 87 percent occupied, with average remaining lease terms of about five years and little near-term rollover. That will provide the buyer with both stable cashflow and the opportunity to boost revenue by leasing vacant space.
AREA made the purchase via its $759 million AREA Value Enhancement Fund 7 and is aggressively seeking additional value-add industrial acquisitions. Including this deal, the vehicle has in¬vested $510 million in various property types. The latest acqui¬sition fits its strategy for the industrial sector of buying high-quality warehouses in key markets that offer some upside potential.
“The market continues to price core assets very aggressively,” said Michael Ryan, Managing Director of Cushman & Wakefield Sonnenblick Goldman’s Atlanta Office. “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 are seeing interest from a variety of sources, including debt funds, life companies, conduit lenders and banks at competitive rates.”
With the recovery of the financial markets, and numerous new capital providers coming to market, investors are putting greater reliance on real estate advisors for recapitalizations, acquisition financing, and joint venture structuring to optimize their capital position and returns.
“In our evaluation of the industrial sector, we have been impressed with the depth of the market and strong demand from the lenders,” 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%, 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. |
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About Cushman & Wakefield Sonnenblick Goldman
Cushman & Wakefield Sonnenblick Goldman is the industry’s leading independent real estate investment banking firm. The firm was founded as Sonnenblick Goldman in 1893 and it merged with Cushman & Wakefield in 2007. Cushman & Wakefield Sonnenblick Goldman provides a full range of real estate financial services, including debt and equity placements, joint ventures, hospitality investment sales and workout advisory services, and it collaborates world-wide with other divisions of Cushman & Wakefield. Further information can be found at the firm’s website at www.cushwake.com/sonngold.
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