Also This Week: Lenders Start Backing Homebuilders Again; and Real Estate Company Financings
SL Green Realty Corp. and The Moinian Group reached an agreement to recapitalize Three Columbus Circle - a midtown Manhattan office tower in the final stages of a major redevelopment. The loan is currently is special servicing after the borrower quit making loan payments last February.
The recapitalization includes a standby mortgage commitment and a potential future investment by SL Green that will make funds available for the completion of the redevelopment and lease-up of the property.
The current loan on the property was originated at the start of 2006 in the amount of $250 million. It is scheduled to mature in January 2016. The loan is held by Wachovia Bank Comm. Mortgage Trust 2006-C23.
The Moinian Group will direct the completion of the $175 million transformation of Three Columbus Circle.
The property is a 26-story 768,565-square-foot property at 1775 Broadway that occupies the entire block between Broadway and Eighth Avenue and between 57th and 58th streets. It overlooks Columbus Circle and the southwest entrance to Central Park.
The complete modernization, which is near completion, will reposition Three Columbus Circle as a Class A property expected to attract office and retail tenants seeking high-quality space in a prestigious location.
FTI Schonbraun McCann acted as advisors for this transaction.
Lenders Start Backing Homebuilders Again
Toll Brothers Inc. finalized a new 4-year $885 million bank credit facility. The unsecured facility matures in October 2014 and replaces the company's existing $1.89 billion revolving credit facility, which was scheduled to mature in March 2011. Toll Bros. repaid a $331.7 million term loan that was part of that facility. The new credit facility has an accordion feature under which it can increase to a maximum of $2 billion, subject to certain conditions set forth in the Credit Agreement and the availability of additional bank commitments.
"This is the first new unsecured credit facility completed by a publicly traded homebuilding company since the financial crisis of 2008," said Martin P. Connor, the company's CFO. "As such, we believe this transaction is recognition by the banking community of the prudent manner in which we have navigated these difficult economic times, and, more importantly, is a strong vote of confidence in our future."
Citigroup Global Markets, Deutsche Bank Securities and RBS Securities acted as joint lead arrangers and joint bookrunners. Other participating lenders included Citibank, Deutsche Bank Securities, The Royal Bank of Scotland, SunTrust Bank, PNC Bank, Capital One, Bank of Montreal, Sumitomo Mitsui Banking Corp., Wells Fargo Bank, Comerica Bank, U.S. Bank and California Bank & Trust.
Additional Real Estate Company Financings
CB Richard Ellis Group Inc. is in discussions with its lenders about the potential to refinance $1.5 billion of total debt outstanding as of Sept. 30, 2010 under its existing credit agreement. This debt would be pre-paid or refinanced with $500 million of cash on hand, net proceeds from a $350 million notes offering and up to $650 million of secured term loans under new senior secured credit facilities. In addition, the company is targeting a new $700 million secured revolving credit facility. The company's subsidiary, CB Richard Ellis Services Inc., has entered into an engagement letter with Credit Suisse Securities (USA), Banc of America Securities and HSBC Securities (USA) to arrange such new senior secured credit facilities.
U-Store-It Trust closed an amendment to its $450 million credit facility consisting of a $200 million unsecured term loan and a $250 million unsecured revolving credit facility. The amended credit facility has a 3-year term expiring on Dec. 7, 2013. At closing, the $200 million term loan is outstanding and there were no amounts outstanding on the revolver. The amended facility is an unsecured facility compared to the prior secured facility. The amended facility pricing is based on 30-day LIBOR compared to a 1.5% LIBOR floor in the prior facility.
First Industrial Realty Trust Inc. amended its senior unsecured revolving credit facility agreement. As part of the agreement, First Industrial made a $100 million paydown and the capacity of the credit facility now totals $400 million, comprised of a $200 million term loan and a $200 million revolving facility. The interest rate on the term loan is LIBOR plus 325 basis points, with no facility fee. The interest rate on the revolving facility has been increased from LIBOR plus 100 basis points to LIBOR plus 275 basis points at the Company's current credit ratings, plus a 50 basis point facility fee. The maturity date remains September 2012.
Associated Estates Realty Corp. closed on a $250 million senior unsecured revolving credit facility. This facility will replace the company's current $150 million line of credit and the new facility will have a 3-year term, with a 1-year extension option. PNC Capital Markets and Wells Fargo Securities acted as co-lead arrangers of the facility. The other participating banks are US Bank, Raymond James Bank, The Huntington National Bank, Citibank, Compass Bank, and RBS Citizens.
Hersha Hospitality Trust signed a commitment letter with TD Bank and TD Securities (USA) for a proposed $225 million senior secured revolving credit facility, which would replace Hersha's current $135 million senior secured credit facility. TD Bank will serve as the sole administrative agent and TD Securities (USA) LLC will serve as lead arranger and book manager. The proposed $225 million senior secured revolving credit facility matures in three years with an extension option for an additional year and may be upsized to $250 million. Borrowings will bear interest at a rate determined by a leverage-based pricing grid. LIBOR loans will bear interest at LIBOR plus an applicable margin of either 350 or 375 basis points per year, subject to a LIBOR floor of 75 basis points per year. Hersha expects that other terms, conditions and covenants of the new credit facility will be generally consistent with the terms of its existing credit facility. The company expects to close on the revolving credit facility during the fourth quarter of 2010.
Healthcare Trust of America Inc. entered into a new credit agreement with JPMorgan Chase Bank, as administrative agent, and Wells Fargo Bank and Deutsche Bank Securities, as syndication agents, for an unsecured $200 million revolving credit facility. The agreement will have an initial term of 12 months, with two three-month extension options. The maximum principal amount may be increased by an additional $200 million subject to such additional financing being offered and provided by existing lenders or new lenders under the Credit Agreement.
Sunstone Hotel Investors Inc. finalized terms with its lead banks on a new senior corporate credit facility. The initial facility size is expected to be $150 million and will include an option to increase the size of the facility by $100 million subject to lender approval. The lender group is expected to be led by Bank of America Merrill Lynch and J.P. Morgan, and the company expects several of its key relationship banks to commit as co-lenders. The company expects to close the new facility during the fourth quarter. Separately, the company has agreed to preliminary terms for a new non-recourse mortgage on its Hilton Times Square. The new mortgage is expected to have a 10-year term and an interest rate locked at 4.97%. The total principal amount of the new mortgage is expected to be $90 million. The proceeds from the new mortgage will be used in part to repay the existing $81 million mortgage, which bears an interest rate of 5.915% and which matures on Dec. 1. Excess proceeds will be used for general corporate purposes.
Chatham Lodging Trust closed an $85 million revolving secured line of credit. The credit facility carries a 3-year term and an interest rate of LIBOR plus a margin based on the company's leverage ratio; at levels less than 30% the margin is 325 basis points, subject to a LIBOR floor of 1.25 %. The line of credit has an accordion feature that provides the company with the ability to increase the facility to $110 million. Participating lenders for the secured line of credit include Barclays Capital, Regions Capital Markets, Credit Agricole Corporate and Investment Bank, UBS Securities and US Bank National Association.
Kennedy Wilson's joint venture with
The LeFrak Organization has refinanced a portfolio of three multifamily properties with new debt in the amount of $71.2 million at an interest rate of 4.39%. Terms include 10-year fixed-rate financing. The refinanced properties are in California and Oregon. CB Richard Ellis, through its Fannie Mae DUS lending program, served as the lender.
Forest City Enterprises Inc. closed a 10-year, $62 million loan for the company's Station Square mixed-use property in Pittsburgh, PA. The CMBS financing carries a 5.85% interest rate and allowed repayment of three separate bank loans totaling $58.6 million. The 652,800-square-foot Station Square is on Pittsburgh's south side along 1.2 miles of the Monongahela River. Tenants include Hard Rock Cafe, the Gateway Clipper Fleet and U.S. Bank.
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Mark Heschmeyer
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