Faropoint is set to close on a $223 million loan this week backing its acquisition last summer of a 1.8 million-square-foot industrial portfolio across five states.
Blackstone Mortgage is ready to originate the bridge loan, according to information in a new commercial real estate collateralized loan obligation the lender is preparing to issue.
The financing represents 70% of the $318.8 million purchase price for 24 warehouse and distribution properties. Faropoint Industrial Value Fund III acquired the assets from Singapore-based Mapletree Investments for $306.2 million, or $182 per square foot, last summer.
Faropoint contributed $88 million in equity, or 28.3% of total transaction costs, toward the financing transaction, according to analysis of the CRE CLO offering by Fitch Ratings.
Blackstone's financing comes as Faropoint looks to shore up tenancy across the portfolio.
Fitch assigned a below-market valuation to the portfolio of $162.1 million, or 49% below the appraised value, citing significant rollover exposure. Sixty-nine leases covering 1.3 million square feet expire during the loan term, with peak rollover hitting in 2027 and 2028.
Faropoint plans to stabilize operations, push rents to market on near-term rollovers, improve tenant credit quality and enhance functionality for retention, according to Fitch.
Faropoint and Blackstone Mortgage did not respond to requests for comment.
The portfolio consists of 24 warehouse, distribution and flex industrial properties across eight metropolitan areas. The portfolio spans infill markets in Georgia, Florida, New Jersey, Texas and Pennsylvania. Properties averaged 91.2% occupancy as of January.
The largest property, 260-280 Hansen Access Road in King of Prussia, Pennsylvania, accounts for 7.8% of the net rentable area.
The MapleTree Tamarac Business Park on North Hiatus Road in Tamarac, Florida, is the second-largest property backing the loan.
The portfolio has 78 tenants per the January rent roll. These tenants operate in industries that include distribution, repair and manufacturing. The largest tenant is PepsiCo Global at the King of Prussia properties, and it accounts for 8.7% of base rent, according to Fitch.
The loan is interest-only for the full term with no future funding reserves. The loan is scheduled to mature in February 2029 with two one-year renewal options, Fitch said.
Faropoint operates 30 million square feet across 500 warehouse properties in 16 markets.