This week, CRED iQ reviewed the commercial real estate lending landscape and highlighted 5 properties that have secured financing within the past month. Using the CRED iQ platform’s Comps functionality, which features propriety Comps scoring for the CRE loan universe, we compared lending terms and loan structures to get a sense of the trends in the CRE lending environment. Additionally, we provided valuations for each asset to evaluate leverage levels in relation to the originators’ LTVs, similar to last month’s WAR Report on the lending landscape. The CRED iQ valuations factor in a base-case (Most Likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.
209,831 sf, Flex Industrial, Irvine, CA 92618
A $37.0 million loan was originated by Société Générale Financial Corporation (SocGen) on August 30, 2021 to refinance existing debt of $16.7 million and return approximately $19.6 million in equity to the loan sponsor, Paul Queyrel – president of TriQuest Development Company. The loan was structured with a 10-year term and requires interest-only payments at a rate of 3.13%. The loan will be locked out from prepayment for 2 years, and after lockout will require a yield maintenance charge for prepayment prior to its open period. CRED iQ’s most relevant comp is the $15.0 million Newport Court loan, which was originated in January 2021 and has an interest rate of 2.97%. Newport Court is secured by a 212,283-sf industrial property that is also located in Irvine, CA.
The Parkway Irvine loan is secured by fee interest in a 209,831-sf industrial property that was developed in 1989 and features 12 buildings set across 14 acres located in Irvine, CA. Most of the buildings operate as single-story flex buildings and approximately 34% of the GLA is primarily used as office space. The property was 88% occupied as of August 16, 2021 and no individual tenants account for greater than 4% of the GLA. With such a granular rent roll, lease rollover management will be relevant in 2023 and 2024 when leases accounting for a combined 52% of the GLA are scheduled to expire. A July 23, 2021 appraisal valued the property at $62.4 million, equal to $279/sf, which implied an LTV of 59.30% and a capitalization rate of 5.47% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.
|Address||15375 Barranca Parkway|
Irvine, CA 92618
|Building Size||209,831 sf|
|MSA||Los Angeles-Long Beach-Santa Ana, CA|
|MyQ Concluded Value||$60,440,000|
15-17 Park Avenue
97 units, Multifamily, New York, NY 10016
A $31.0 million loan was originated by SocGen on August 16, 2021 to refinance existing debt on a 97-unit high-rise multifamily building located on the edge of the Murray Hill submarket of Manhattan, NY. The 10-year interest-only loan has an interest rate of 3.34%. The loan will be locked out from prepayment for 2 years, and defeasance will be permitted after lockout through the remainder of the loan term. The borrower sponsor for the loan is Scott Goldstein. CRED iQ’s highest scoring comp is the $14.8 million 234-236 East 24th Street loan, which was originated in March 2020 and has an interest rate of 3.10%. The comparable loan is secured by a 36-unit multifamily property located slightly south of the subject, closer to Kips Bay.
The 15-17 Park Avenue mortgage loan is secured by fee interest in a 16-story multifamily property that contains 85 units that lease at market rate and 11 units that are rent stabilized. One unit is reserved for the superintendent and the property features an additional 2,810 sf of commercial space. Average asking rent for Q1 2021 was $3,802 per unit, which represented a 5% decline compared to 2020 and a 21% decline compared to 2019. The rent declines exemplify the downward pressure on rents caused by the pandemic. The property typically operated with about 98% occupancy pre-COVID but occupancy declined to 93%/94% for much of 2020 and 2021. Occupancy was listed as 100% as of July 20, 2021, including all residential and commercial units. The property was appraised for $50.1 million as of July 8, 2021, equal to $516,500/unit, which implied an LTV of 61.90% and a capitalization rate of 4.27% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.
|Name||15-17 Park Ave|
|Address||15-17 Park Avenue|
New York, NY 10016
|Building Size||97 units|
|MSA||New York-Northern New Jersey-Long Island, NY-NJ-PA|
|MyQ Concluded Value||$44,590,000|
172,357 sf, Mixed-Use (Retail/Office), Murrieta, CA 92562
A $23.0 million loan was originated by UBS on August 27, 2021 to refinance existing debt on a 172,357-sf retail property located in Murrieta, CA, just north of Temecula. The loan has a 10-year term and requires amortizing debt service payments based on a 30-year schedule with an interest rate 3.73%. The loan is locked out from prepayment for 1 year, and after lockout will require a yield maintenance charge for prepayment prior to its open period. CRED iQ’s most relevant comp is the $16.2 million Bel Villaggio loan, which was originated in February 2020 and has an interest rate of 3.57%. Bel Villaggio is located in nearby Temecula and has similar size and use as Murrieta Spectrum, although with a much more granular rent roll.
Although property information provided for Murrieta Spectrum lists the property type as mixed-use, the collateral for the loan is primarily designed and operated as a retail center. The largest tenants are Ashley Furniture and Savers Thrift Store, which are both retail tenants and account for a combined 45% of the GLA. The third-largest tenant, STG International, accounts for another 15% of the GLA, but the tenant will not take occupancy until October. Prior to the lease signing with STG International, which will bring occupancy to 95%, the property had operated at approximately 80% occupancy for several years. The property was appraised for $45.25 million as of April 22, 2021, equal to $263/sf, which implied an LTV of 50.90% and a capitalization rate of 5.80% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.
|Address||25125 Madison Avenue|
Murrieta, CA 92562
|Building Size||172,357 sf|
|MSA||Riverside-San Bernardino-Ontario, CA|
|MyQ Concluded Value||$37,310,000|
Nanogate North America (Techniplas)
266,180 sf, Industrial, Mansfield, OH 44903
This $9.5 million loan was originated by UBS on August 20, 2021 to fund the sale-leaseback acquisition of a manufacturing facility located in Mansfield, OH. The property was acquired by MAG Capital Partners LLC and will be solely leased to its previous owner, Nanogate North America, a component manufacturing firm. The tenant was acquired by Techniplas, which is also an engineering and manufacturing company, and the property serves as the company’s only US location. The 10-year loan has an interest rate of 4.20% and requires amortizing debt service payments based on a 30-year schedule. The loan will be locked out from prepayment for 2 years, and after lockout defeasance will be permitted through the remainder of the loan term. Due to the collateral property’s location in a tertiary market, many of the loan’s comps had relatively low scores. However, two notable loans secured by single-tenant industrial properties within 50 miles of the subject included Revere Plastics, which was originated in March 2019 and has an interest rate of 4.41%, and 9040 Smith’s Mill Road, which was originated in March 2020 and has an interest rate of 3.70%.
The Techniplas manufacturing facility comprises 3 buildings set across a 23-acre parcel. The tenant signed a 20-year lease at the property that is scheduled to expire 10 years beyond loan maturity. The property was appraised for $15.25 million, equal to $57/sf, as of June 17, 2021, which implied an LTV of 62.30% and a capitalization rate of 6.33% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.
|Name||Nanogate North America|
|Address||150 East Longview Avenue|
Mansfield, OH 44903
|Building Size||266,180 sf|
|MyQ Concluded Value||$14,750,000|
Westgate Shopping Center
47,331 sf, Retail, San Antonio, TX 78216
RPD Catalyst, LLC secured a $7.2 million loan from LMF Commercial (formerly Rialto Mortgage Finance) on August 27, 2021, to refinance existing debt on a 47,331-sf neighborhood center located in San Antonio, TX. The 10-year loan has an interest rate of 4.06% and requires amortizing debt service payments based on a 30-year schedule. One of the highest scoring comps for this loan is University Square Shopping Center, which secures a loan that was originated in May 2019 and carries an interest rate of 4.35%.
Westgate Shopping Center is anchored by Guitar Center, which accounts for 71% of the property’s GLA. The anchor tenant has been severely impacted by the pandemic and recently emerged from bankruptcy in December 2020. Guitar Center’s lease expires in November 2026, which is about halfway through the loan term. The ongoing financial health of Guitar Center as well as a favorable renewal outcome at lease expiration will be the primary credit drivers for this loan. Positive news regarding Guitar Center broke in recent days after a Debtwire report indicated the company filed with the SEC to register for an IPO. The property was 100% occupied at origination and had an appraisal value of $10.4 million, equal to $219/sf, as of July 15, 2021. The appraisal implied an LTV of 69.20% and a capitalization rate of 6.80% based on the originator’s underwritten net cash flow. For the full valuation report and loan-level details, click here.
|Name||Westgate Shopping Center|
|Address||7311 San Pedro Avenue|
San Antonio, TX 78216
|Building Size||47,331 sf|
|MSA||San Antonio, TX|
|MyQ Concluded Value||$9,700,000|
CRED iQ is a commercial real estate data, analytics, and valuation platform providing actionable intelligence to CRE and capital markets investors. Subscribers to CRED iQ use the platform to identify valuable leads for leasing, lending, refinancing, distressed debt, and acquisition opportunities. For full access to our loan database and valuation platform, sign up for a free trial below: