🏢 🔋 💰 $5.5 Billion in Deals Shaking Up Last Week: L&L, Databank, Fairway Lumber

Good Morning TIM Enthusiasts

A captivating interplay of ambition and caution across the CRE, ABL, and Growth Cap sectors marked the past week's financial landscape. Top CRE loans included L&L Holding's $911 million refinancing for its Midtown East office tower and Blackstone's $428.5 million hotel portfolio refinance. In the ABL space, Legacy Corporate Lending provided Fairway Lumber with a $25 million credit facility. Growth Capital saw DataBank secure a $725 million credit facility for data center expansion and Quinn Residences expand its revolving credit facility by $350 million. The SBA introduced low-interest disaster loans for businesses affected by the Francis Scott Key Bridge collapse, and the EPA announced $20 billion in grants for clean energy projects. However, challenges persisted, with bankruptcies filed by 99 Cents Only Stores and Boisson, ongoing legal battles for Ben Nye, and alleged USDA discrimination against Black farmers. As we delve into the intricacies of this financial choreography, it becomes evident that success demands agility, resilience, and the ability to adapt to the ever-evolving market conditions.....all in a mere 5-minute act!

Let’s get into it.

Check out our video on last week’s top 10 finance deals: https://youtu.be/Bu19VHxDUEw

🌆Top Weekly CRE Deals

• L&L Holding’s NYC Park Ave $911M Refi loan from Sumitomo Bank Read

• Blackstone $429M Hotel CMBS Refi Loan from Morgan Stanley & Société Générale Read

• Apollo backs Brookfield's Resi Acquisition with $410M Loan Read

• Texas’ largest hotel scores $300 Million CMBS Loan Read

• Kriss Capital’s $185M loan to Navigation’s Manhattan Luxury Condo Read

• Citi’s $155M 5-yr CMBS loan to William’s Equities NYC’s Chelsea Office Read

• Scale’s $150M Construction Loan to Beitel’s Bronx Multifamily Read

• Northwestern $127M Refi to Allstate’s & MetLife’s Chicago luxury Apt Read

• JPM’s $120M Mixed-Use Resi Construction Loan to Tidal Real Estate Read

• The Hudson Companies & Housing Works’s $105M Mixed-Use Affordable Housing Construction Loan from Webster Bank & HPD Read

• TPG Real Estate Credit’s $104M Refi Loan for Silverstein Capital’s Boston Parking Garage Read

Summary
Last week, we witnessed significant activity in the commercial real estate financing market, with major deals spanning office, multifamily, hospitality, and mixed-use properties. The top three loans included L&L Holding Company's $911 million refinancing of their Midtown East office tower anchored by Citadel, Apollo Global Management's $410 million senior loan for the acquisition of a 2,150-unit multifamily portfolio in San Francisco, and a $428.5 million refinance by Morgan Stanley and Société Générale for a 23-hotel portfolio owned by Blackstone.

Lenders remain focused on borrowers with strong track records and properties that offer attractive amenities and stable cash flows. Multifamily, particularly in high-demand markets like San Francisco, continues to be a favored asset class. However, the successful refinancing of the Sheraton Dallas Hotel, Texas' largest hotel, at $300 million, shows that institutional lenders are still willing to back high-quality hospitality assets in recovering markets.

Sumitomo Mitsui Trust Bank emerged as the top lender, providing a substantial $911 million loan to refinance L&L Holding Company's Midtown East office tower. The average loan size across this week’s featured deals is approximately $277 million, indicating a focus on large-scale transactions by major market participants. Refinancing activity appeared to be the most prominent. However, this week also showcased significant construction financing activity.

Key Insights

• Private debt lenders are increasingly filling the gap left by banks, offering flexibility and diversification in the CRE credit markets.

• Despite broader market challenges, lenders remain keen on financing premium, well-located office properties with strong sponsors.

• Multifamily and hospitality assets continue to attract significant investment, with large portfolio acquisitions and refinancings driving deal activity.

 Winners:

• There is ongoing capital support for affordable housing developers and their projects.

• As traditional banks scale back lending, private debt funds like Kriss Capital are seizing opportunities to provide financing for residential assets

• Lenders focusing on premium, well-located assets and strong sponsors, such as Sumitomo and Northwestern, will likely benefit from the ongoing demand for financing in these segments.

• CMBS lenders remain active in the market.
  

Losers:

• The continued focus on premium, well-located office assets may make it more challenging for owners of smaller, less desirable office properties to secure financing in the current market.

• Independent operators may face difficulties obtaining financing, as lenders favor properties backed by experienced sponsors and major hotel brands.

• Owners of older, less-efficient office properties in secondary markets may find it more difficult to secure refinancing or attract tenants, as lenders and occupiers gravitate towards newer, high-quality assets in prime locations.

• The increasing presence of private debt funds and the continued dominance of larger institutional lenders may limit opportunities for regional banks to compete for high-profile financing deals in the current market.

💡 Top Markets/Opportunities:

CRE Lenders:
1) Lending to high-profile office tenants could lead to opportunities with other financial services firms looking for premium office space in major cities
2) Well-established REITs and institutional investors with diverse hospitality holdings
3) Multifamily lending in high-cost markets, possibly extending to other major cities like Los Angeles, Boston, and Washington, D.C.
4) Hotel operators with strong brand affiliations and other major hotel brands undergoing renovations or refinancing could be attractive

CRE Developers:
1) Development opportunities in outer boroughs or secondary markets with strong demand for new housing and partnerships with local contractors, suppliers, and design firms
2) High-end multifamily projects in desirable urban locations, possibly leading to opportunities for developers and construction companies with experience in upscale residential projects

CRE Investors:
1) Office properties with strong, credit-worthy tenants in prime locations and in the stocks of publicly traded companies like Citadel that are expanding their office footprints
2) Large-scale, multi-property residential deals in high-demand markets, possibly through partnerships with experienced operators

CRE Brokers:
1) Brokering loans for institutional investors and REITs with diverse, well-performing hospitality assets and exploring opportunities with individual hotel properties within those portfolios that may require separate financing.
2) Brokering loans for high-end multifamily properties in prime urban locations, as well as for connecting with the owners and managers of these properties who may have additional financing needs for other projects in their portfolios

💸Top Weekly Growth Capital Deals

• TD Securities’s $725M Credit Facility for DataBank Read

• JPMorgan’s $350M Revolver for Quinn Residences Expansion Read

• Intermedia Cloud Communications $345M Balance Sheet Refi Loan from TD Securities Read

• Granite Ridge’s $300M Credit Facility Expansion from Texas Capital Bank & Bank of America Read

• Chart Industries’s $250 Million Amended Facility from JP Morgan Read

• Mesa Labs’s $200M Credit Facility Amendment from JP Morgan Read

• esVolta secures $185 million loan from Nomura Securities Read

• Bank of America’s new $155MM credit facility with AmeriTex Read

• Parafin’s $125M warehouse facility from SVB & Trinity Capital Read

• Comvest Credit Partners’s $117M loan to ACT Entertainment Read

Top Weekly ABL Deals

• Legacy Corporate Lending’s $25M ABL for Fairway Lumber Read

• Electronics Manufacturer’s $1.75M Asset-Based Revolver Read

• Loeb’s $1.5M ELOC for Beef Industry Client Read

Summary

Last week we saw a flurry of exciting financing activity across various sectors. DataBank, a leading provider of enterprise-class data center services, secured a massive $725 million credit facility to fund ongoing expansion projects in key markets like New York, Denver, and Dallas. In the real estate space, Quinn Residences closed a $350 million expansion of its revolving credit facility, increasing total capacity to $1.5 billion to accelerate the development of dedicated rental communities in high-growth Southeastern markets. Cloud communications provider Intermedia also completed an impressive $345 million refinancing to invest in its offerings and partner relationships.

The top lender appears to be JPMorgan, which served as an administrative agent for high-profile transactions like Quinn Residences' $350M credit facility and Intermedia's $345M refinancing and as a direct lender of Chart Industries and Mesa Labs.

The average loan size across this week’s deals was $251 million, reflecting a focus on upper middle-market and larger corporate transactions. Acquisitions and refinancings were prevalent as borrowers took advantage of a liquidity-rich credit environment to make strategic moves. Growth capital and general working capital needs also drove significant financing activity.

Key Insights

• Digital infrastructure financing remains red-hot as providers raise hundreds of millions to build data centers and meet escalating demand for connectivity driven by AI and other bandwidth-intensive applications. Sustainability-linked loans are becoming the norm.

• Refinancing activity is brisk as successful tech-enabled service providers like Intermedia capitalize on favorable credit markets to optimize balance sheets and pursue growth. Banks view these asset-light businesses as attractive lending prospects.

• Rising borrowing bases for oil & gas producers reflect higher commodity prices and improved sector fundamentals. Industry survivors are securing fresh capital to resume drilling programs.
  

Winners:

• Data center REITs and operators are clear winners as they secure huge loans to expand capacity

• Business cloud solution providers are leveraging cheap financing to bolster dominant market positions

• Banks active in the data center space enjoy tremendous lending opportunities as providers raise billions to expand

• Technology-focused banks are capitalizing on the insatiable demand for software and cloud services

Losers:

• Legacy on-premises communications providers risk disintermediation as cloud-based competitors invest heavily in innovation.

• Regional banks may be late to the game in red-hot sectors like data centers and lack sufficient balance sheet heft to lead mega-deals

• Debt providers over-indexed to legacy communications equipment vendors may suffer as cloud solutions gain primacy.

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders: 
1) Data center providers
2) Cloud communications providers
3) Oil & gas producers like Granite Ridge Resources

Family Offices
1) Companies providing critical equipment and services to the booming data center industry
2) Businesses offering innovative construction materials
3) Life sciences tools and services sector

Private Equity Firms
1) Utility-scale battery storage developers
2) Companies providing specialized equipment and services to high-growth industries
3) E-commerce enablement space, particularly companies financing online seller growth

Brokers
1) Emerging growth companies in hot sectors like battery storage, FinTech, and e-commerce enablement.
2) Private equity-backed companies undertaking acquisition

 New Lender Programs

• Eight nonprofits receive $20 billion from the Biden administration for local clean energy initiatives Read

• SBA provides loan assistance for businesses affected by the recent bridge collapse Read

Market News

• March inflation figures reach 3.5%, dampening prospects for an interest rate cut Read

• A notable 34% of SMB executives express concern over rising loan costs Read

• The start of 2024 sees a surge in CMBS debt issuance Read

😲 Didn’t see that one coming

• A CRE executive faces a death sentence amid Vietnam's intense corruption crackdown Read Video

• 99 Cents Only Stores opts for Chapter 11 to streamline the wind-down of operations and optimize the sale of assets Read

• Nonalcoholic retailer Boisson enters bankruptcy and begins store closures Read

• A new lawsuit challenges USDA on claims of discrimination against minority farmers in loan practices Read

• Ben Nye seeks Chapter 11 bankruptcy protection amid ongoing talc lawsuits Read

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