Bank of America and Deutsche Bank have launched a second UK logistics CMBS backed by UK logistics and industrial properties owned by Blackstone Group, according to filings with the US Securities and Exchange Commission.
The filings do not show how big the CMBS is, but sources familiar with the situation said it will be around £300 million, similar to the earlier CMBS.
The CMBS, Stark Financing 2023-1 DAC, is backed by properties Blackstone acquired as part of the takeover of Industrials REIT. Blackstone took Industrials REIT private in the Spring, as reported. The bid valued the entire issued and to be issued ordinary share capital of Industrials at approximately £511.2 million, while there was around £200 million of debt included.
Blackstone reopened the European CMBS market in August, with the launch of Last Mile Logistics CMBS 2023-1 UK, a £263 million CMBS backed by logistics properties around the UK. Citi had backed the CMBS with a £290 million loan. The US investment bank retained the difference.
The market had been frozen since May 2022 due to macroeconomic uncertainty and rising interest rates caused by Russia’s invasion of Ukraine, as reported.
Blackstone’s CMBS in August benefited from the strong performance of the logistics centres. Investors believed the sector had repriced sufficiently.
Prime yields for logistics properties with a 20-years lease have moved out to 4.75% from 3% a year ago, according to a recent presentation by Knight Frank. Recent CoStar data suggests that average transaction yields have also compressed.