⚓ Bank of America $1.3 Billion Hilton Splash

Good Morning TIM Enthusiasts


Last week brought a kaleidoscope of activity in the CRE and ABL sectors, capturing the essence of a market at a crossroads. From GAIA Real Estate's massive $224M refi loan from Greystone to Hilton Grand Vacation's strategic $1.3B refinancing from Bank of America, the market was as much about seizing opportunities as it was about cautionary tales like AppHarvest's insolvency. Let’s dive in for a closer look at who's thriving, surviving, and rethinking their playbook in this intricate financial ballet…PLUS a new bridge lender…in just 4 minutes!

Let’s get into it.

Top Weekly CRE Deals

• Greystone shakes up Stamford apartments with a $224M refi loan Read

• Allianz Life Insurance lights up Nashville shopping with a $125M refi loan Read

• PGIM turbocharges SoCal's industrial heartbeat with an $84M loan Read

• North Bridge redefines Berkeley's hotel with a $50M C-PACE loan Read

• Arbor fires up Jersey City with a $30M construction loan Read

• Seven Hills closes a $25.3M bridge loan for Georgia self-storage Read

• Continuum takes over SoCal retail with a $21M loan from Hanmi Bank Read

• Schelin Uldricks arranges $18.1M loan for Ohio's office portfolio Read

• Greystone doubles down in Stamford with a $15M HUD-Insured loan Read

• Bernard Financial injects $1.2M into Michigan's medical real estate Read

Insight Summary
The prior week's commercial real estate (CRE) financing was eclectic, covering a range of asset classes and geographies in both primary and secondary markets. PGIM's $84.2M loan for logistics assets near LA's ports signaled robust demand for infill logistics. Greystone's $223.9M loan was a testament to market liquidity for proven assets, even in volatile conditions. Meanwhile, North Bridge's $50M C-PACE loan showcased how specialized financing can enhance ROI in the hospitality sector. While last week's loan closings were concentrated in coastal hubs like LA and New York, this week’s deals expanded geographically into inland metros such as Atlanta and Knoxville, signaling a search for yield in secondary markets. Furthermore, the nature of the deals transitioned, moving from office real estate to specialized assets like self-storage and medical offices, hinting at a lender shift towards sectors considered more resilient to interest rate changes.

▲ Winners:
◦ REITs can leverage HUD programs for fixed-rate financing, safeguarding multifamily portfolio yields despite increasing interest rates
◦ For real estate developers, C-PACE financing is a cost-reducing mechanism for green construction, thereby enhancing project viability

▼ Losers:
◦ Regional banks face a squeeze in CRE lending due to rate-induced deposit attrition and risk governance.
◦ Life companies' conservative stance hampers their capacity to extend bridge or repositioning loans amid market fluctuations
◦ For commercial real estate agents, the dwindling availability of bridge loans for non-core deals may shrink viable listings and overall transaction activity.

Top Weekly ABL and Growth Capital Deals

• Tempur Sealy locks in a $1.65B credit bonanza led by JP Morgan Read

• Bank of America offers a $1.3B Term Loan for Hilton Grand Vacations Read

• Express Wash Concepts fuels growth with $150M from MidCap Financial Read

• Accord Financial delivers a $40M windfall to a pet supply manufacturer Read

• Horizon Tech Finance seeds Mirantis with a $35MM venture loan Read

• Mountain Ridge Capital stitches up a $30M loan for Midwest Footwear Read

• Equilibrium Capital provides $30M DIP loan for AppHarvest Bankruptcy Read

• MariaDB restructures and secures a $26.5M lifeline from RP Ventures Read

• Mountain Ridge Capital fuels action sports with a $25MM credit line Read

• Garrington Capital offers a $21M loan for a Texas industrial contractor Read
  
  

  Notables

  Access Capital funnels $15M financing Read

  North Avenue $8M USDA-backed loan Read

  Clarus Capital $7MM lease Read

  BankUnited $3M loan Read

Insight Summary
The previous week's refinancing surge, spearheaded by Hilton Grand's $1.3B and Tempur Sealy's $1.15B transactions, took advantage of subdued rates to boost liquidity and prolong debt tenures, affording firms the financial flexibility for both expansion and risk mitigation. Yet, the market's contraction is unmistakable, highlighted by AppHarvest's insolvency and a series of Q3 downsizings and reorganizations. Further, MariaDB's cessation of products and labor reductions signal a moment of truth for companies with unviable growth stories. The private debt market is sending mixed signals compared to last week. Blue-chip companies are proactively reinforcing liquidity via timely refinancing, while non-traditional lenders persist in supplying growth financing. Nevertheless, with capital becoming less abundant, red flags suggest an uptick in defaults and corporate restructurings is imminent.

▲ Winners:
◦ As economic pressures mount, demand for turnaround advisors and restructuring lawyers is set to surge, particularly for companies teetering on the edge of profitability
◦ Cash flow-positive enterprises are seizing the moment to refinance, aiming to reduce rates and extend maturities for added insulation against market volatility
◦ Specialty financiers such as factors, equipment lessors, and MCA lenders are capitalizing on tighter bank underwriting, witnessing heightened deal flow and commanding premium rates

▼ Losers:
◦ Speculative startups and growth firms operating in the red are grappling with dwindling capital access, pushing their equity-dependent models toward a financial cliff edge.
◦ As senior lenders tighten the reins, mezzanine lenders and high-yield investors find themselves in a precarious position, facing a shrinking pool of highly leveraged deals.
◦ Crypto lenders are taking a hit as collateral values nosedive, underscoring the intrinsic risks of deals pegged to volatile assets—even during bullish runs.

Top Lender Credit Facilities

• Truist Bank syndicate increases Main Street Capital SPV facility by $175M Read

• SWK Holdings amplifies its revolving credit facility to $60MM Read

Insight Summary
Last week in capital markets underscored the increasing demand for financing in the lower middle market, as evidenced by Main Street's and SWK's expanded credit facilities. Despite macroeconomic uncertainty and climbing Fed rates, lenders fiercely vied for relationships with solid sponsors by boosting their lending capacities. From the previous week, the credit market remains resilient but increasingly selective, favoring well-positioned firms in sectors like equipment finance and fintech. At the same time, startups and highly leveraged companies face liquidity constraints.

▲ Winners:
◦ Financial advisors are delivering value by robustly conducting scenario analyses on capital stacks, particularly in the face of escalating interest rates, guiding clients to optimized capital allocation.
◦ Specialty finance platforms like SWK are capitalizing on their sector-specific acumen to establish a competitive foothold in specialized industries, such as biopharma.

▼ Losers:
◦ Distressed Firms are wisely taking preemptive action to renegotiate and restructure their credit facilities, thereby averting a liquidity crunch
◦ Online lenders prioritizing speed over thorough underwriting might expose themselves to a higher risk of defaults, particularly as economic growth slows.

Market Summary
Last week saw a flurry of CRE, ABL, and Growth Capital loans, with Florida, Kentucky, California, and Connecticut leading the charge. Illinois stood out for major construction projects, like Ace Hardware's new 250,000 sqft Oakbrook headquarters, while New York, Texas, and California led in property acquisitions such as Austin's Onyx apartments. Chicago, New York, and Washington, DC, were hotspots for CRE development and sales. The CRE debt market enjoyed growth in both deal volume and average size, particularly in the industrial sector, while the ABL and growth capital markets saw more deals but smaller average sizes, signaling market stabilization.

Key Insights
⮞ In Los Angeles, alternative lenders remain the mainstay for small business funding, indicating stable SME lending despite economic uncertainty.
⮞ The $50 million C-PACE deal in Berkeley highlights alternative financing's growing role in the demanding hospitality sector, opening doors for specialized lenders.
⮞ Amid rising rates, companies like Hilton Grand Vacations and Tempur Sealy seek to refinance, creating opportunities for lenders to offer competitive terms on expiring deals.
⮞ High-interest rates could drive pricier borrowing and funnel bank-rejected borrowers to alternative lenders, who should remain cautious.
⮞ Despite supply gaps in Miami, high multifamily rents signal resilience and low risk, attracting yield-focused lenders.
⮞ In uncertain times, firms like Phaxis and Mountain Ridge Capital favor customized over generic financing, prompting lenders to align debt facilities with specific growth and financial needs.

😲 DIDN’T SEE THAT ONE COMING

• Showfields takes a financial pivot as it enters bankruptcy protection. Read

• Shift Technologies opts for Chapter 11 restructuring. Read

LAST WEEK’S DEAL SUMMARY INSIGHTS

🤵 LENDER LOUNGE

Looking to close your CRE deal? This week’s Washington lender could help:

Time to Close: 2-3 weeks
Paperwork Required for LOI: Summary of Request, Property Description, Income & Expense, PFS, Rent Roll
Min to Max Loan: $1M to $35M
Sweet Spot: $120,000 – $300,000
Min FICO Score: N/A
Interest Range: 10.99% - 12.99%
Loan-To-Value: 70%
Origination Fee: 2 - 3%
Due-Diligence Fee: Depends on the cost of third-party reports
Collateral Requirements: Office, Industrial Flex or Warehouse, Retail, Mobile Home Parks, Hospitality, Multifamily, Self-Storage
Repayment Terms: Monthly, interest-only payments
Pre-Payment Penalty: 6-month max yield maintenance
Extension of Loan: Yes, two years max on small loans and three years on larger
Geography: Do not lend in Nevada
Refinance into a longer-term loan: No 

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