🚗 🔬 Best of This Week’s Deals: Group 1 Auto, Related Beal, Rocky Brands

Good Morning TIM Enthusiasts

This week in Deals:

$728 million in top 10 CRE deals
$7.43 billion in top 10 Growth Cap deals
$308 million in top 10 ABL deals

CRE Lenders
Santander Bank, Bank of America, Hudson Bay Capital, Franklin BSP Realty Trust, G4 Capital Partners, Forman Capital, BridgeInvest, GDS Brightstar & Sabal Investment Holdings, Merchants Capital, CIBC

Growth Cap Lenders
U.S. Bank, Bank of America, JPMorgan Chase Bank, Goldman Sachs, Wells Fargo Securities, PNC Capital Markets, Citizens Bank, Fifth Third Bank, CIBC, National Bank of Canada, NordLB, SMBC and Export Development Canada, MetLife Investment Management and IFM, Mizuho Bank, Comerica Bank, Pharmakon Advisors, Pollen Street Capital, SLR Credit Solutions, Encina Lender Finance

ABL Lenders
Bank of America, Accord Financial, Wintrust Business Credit, LSQ, eCapital, King Trade Capital, Republic Business Credit, Alleon Healthcare Capital

🌆Top Weekly CRE Deals

• Related Beal secures $280M financing for Seaport life sciences project Read

• energyRe secures $155M project financing and $85M tax equity for 108 MW solar and 198MWh BESS in the Lone Star project Read

• Walker & Dunlop arranges $155M refinance for Manhattan's Lexington Hotel Read

• Franklin BSP Realty Trust funds $125M for Southwest Industrial Portfolio Read

• G4 Capital Partners invests $117M in 960 Franklin Avenue acquisition and development Read

• Miami River project secures $68M loan for short-term rental development Read

• BridgeInvest lends $55.5M to acquire and renovate Houston’s Park on Voss Read

• GDS Brightstar extends $34M for leasing the new Meatpacking Office Building Read

• Merchants Capital refinances $29M for NYC Senior Housing Property Read

• CIBC allocates $29M construction loan for New Jersey Industrial Facility Read

Summary
Last week, we saw a flurry of significant commercial real estate financing activity across various sectors and geographies. The development team behind Vertex Pharmaceuticals' 345,000 SF research center in Boston's Seaport secured a $280 million construction loan from Santander Bank, marking one of the week's largest deals. In the renewable energy space, energyRe obtained $155 million in project financing and an $85 million tax equity commitment from Santander and Bank of America, respectively, for its 108 MWdc Lone Star Solar project in South Carolina, which includes a substantial 198MWh battery storage component. Other notable transactions included Walker & Dunlop's $155 million refinancing of the historic Lexington Hotel in Midtown Manhattan on behalf of joint venture owners MCR, Island Capital Group, and Three Wall Capital, with Hudson Bay Capital as the lender.

Last week, Santander Bank emerged as the top lender, participating in two significant transactions. The most prominent activity seems to be refinancing existing debt and providing construction financing for new developments. Additionally, financing was notable for development and value-add projects across various property types, including life sciences, renewable energy, hospitality, and industrial. This trend suggests that lenders are willing to support projects with clear potential for value creation, especially when sponsored by experienced developers and operators. Cities that saw significant lending activity included Boston, Miami, and New York City, with the refinancing of the Lexington Hotel in Midtown Manhattan.

Key Insights

• Life sciences and renewable energy projects continue to attract significant financing due to their strong fundamentals and long-term growth potential

• Industrial portfolios with high occupancy rates and strategic locations in major metropolitan areas remain appealing to lenders

• Despite challenges posed by the pandemic, financing is available for well-located hospitality assets in prime markets like New York City, especially those with value-add potential.

Loan Structures
The most common loan structures observed last week included construction loans with tenors of 2-3 years and LTVs of 60-75%, bridge loans with tenors of 1-3 years, LTVs of 65-80%, and interest-only payments, and longer-term refinancing with tenors of 7-10 years or more, LTVs of 60-75%, and amortization periods of 25-30 years. These structures reflect a CRE market where lenders are willing to finance high-quality projects across various sectors and strategies while maintaining a prudent approach to risk management through lower LTVs, stricter covenants, and a focus on experienced sponsors.

Winners:

• Renewable energy developers

• Life sciences companies

• Banks with robust ESG lending practices.

• Debt funds with expertise in complex transactions
  

Losers:

• Office tenants in oversupplied markets

• Hospitality operators in secondary and tertiary markets

• Lenders heavily exposed to office assets in challenging markets

• Lenders lacking expertise in structured finance

💡 Top Markets/Opportunities:

CRE Lenders Focus:
1) Life sciences real estate developers
2) Renewable energy project sponsors
3) Industrial real estate owners and operators
4) Short-term rental developers in popular destinations

CRE Developers Focus:
1) Life sciences companies expanding in biotech hubs
2) Renewable energy companies in states with supportive policies

CRE Investors Focus:
1) Medical office buildings near major healthcare facilities
2) Self-storage facilities in high-growth submarkets

CRE Brokers Focus:
1) Private equity firms and family offices investing in industrial real estate
2) Developers of mixed-use projects in urban cores

💸Top Weekly Growth Capital Deals

• Yum! Brands, Inc. completes $2B refinancing of Senior Secured Credit Facilities Read

• Group 1 Automotive enhances revolving credit facility to $2.5 billion Read

• Cedar Fair closes $1.0B Term Loan B, and $300M revolving credit deal Read

• Conterra Networks finalizes $580M debt capital raise Read

• Air Lease increases unsecured revolving credit facility by $400M to $7.8 billion Read

• Novocure secures $400M multi-tranche non-dilutive debt financing from Pharmakon Read

• Northern Oil & Gas expands revolving credit facility by $250M Read

• Capify acquires $194M credit facility from Pollen Street Capital Read

• SLR Credit Solutions agents $50MM senior credit for Fluent Read

• Encina Lender Finance issues $25MM senior credit to consumer unsecured installment lending platform Read

Top Weekly ABL Deals

• Bank of America orchestrates comprehensive $225M debt refinancing for Rocky Brands Read

• Accord Financial delivers $25M credit facility for plastics manufacturer Read

• Wintrust Business Credit secures $25M ABL line for frozen seafood importer and distributor Read

• LSQ establishes $20M invoice finance for Ohio-based aerospace tooling manufacturer Read

• eCapital provides $5M funding to facilitate US debut for medical supplier Read

• King Trade Capital increases client purchase order line by $4.5M Read

• LSQ provides a $3.5M invoice finance facility for a hospitality/IT staffing firm Read

• King Trade Capital funds $3M purchase order finance for AZ Home Décor company Read

• Republic Business Credit grants $1.5M recourse factoring to Sustainable FoodTech manufacturer Read

• Alleon Healthcare Capital establishes a $1M accounts receivable factoring facility for a NY-based home infusion nursing company Read

Summary

Last week, we saw significant asset-based lending and credit facility space activity. Group 1 Automotive completed a $500 million upsize in its revolving syndicated credit facility to $2.5 billion. Yum! Brands subsidiaries refinanced their existing $713 million term loan A facility and $1.25 billion revolving facility through a new $500 million term loan A and $1.50 billion revolving credit facility. Cedar Fair entered into new $1.3 billion credit facilities, including a $1.0 billion term loan B and $300 million revolving credit facility. These deals reflect the strong demand for capital among major corporations.

It was difficult to identify a single top lender last week conclusively. However, major banks like Bank of America and JP Morgan are notably leading sizable syndicated transactions. King Trade Capital and LSQ stand out among non-bank lenders for arranging sizable ABL facilities supporting client growth. Borrowers represent a range of company sizes and industries, from large public corporations to privately-owned SMEs. Healthcare, telecommunications, aerospace, food & beverage, and retail sectors seem well-represented in loan closings.

The most common financing activities appear to be refinancing of existing credit facilities on more favorable terms, expanding borrowing capacity to support growth, often through upsizing revolving credit lines, and obtaining PO and factoring financing to boost working capital and fulfill increasing sales

Key Insights

• ·Use of asset-based lending to support growth capital needs of small and mid-sized companies

• Increase in credit facilities to businesses in industries like healthcare, telecom, and aviation

• Refinancing of existing debt on more favorable terms to optimize capital structure
  

Loan Structures

Based on last week’s transactions, the most common tenor and duration of loans appears to be in the 4-7 year range. Several major credit facilities and term loans mentioned have maturities between 2027 and 2029. The most prevalent financing types seem to be revolving credit facilities and term loans. Many companies are opting for a combination of the two, with revolving lines used for working capital and liquidity needs, while term loans provide longer-dated capital for growth investments or debt refinancing. Asset-based lending solutions like factoring and PO financing are common, particularly for small and mid-sized businesses looking to monetize their receivables or fulfill large orders. These facilities are often structured as revolving lines with borrowing base availability tied to the value of the underlying assets.

Winners:

• Aerospace parts makers

• Food & beverage companies

• Large banks like Bank of America, JP Morgan, and Wells Fargo

• Alternative lenders like Alleon, Accord, Capify, eCapital, King Trade, LSQ and Republic

Losers:

• Businesses with recent losses

• Companies with seasonal sales cycles

• Lenders overly concentrated in industries

• Banks with capital constraints or high exposure to challenged credits

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus 
1) Aerospace parts makers
2) Food & beverage companies
3) Home healthcare and medical services companies
4) Telecommunications and broadband providers

Family Offices Focus
1) Innovative food brands that are capturing market share with differentiated healthy, organic or plant-based offerings
2) Companies providing tech-enabled home health services, remote monitoring, and patient engagement solutions
3) B2B services and software companies that are helping traditional industries digitize their operations and supply chains

Private Equity Firms Focus
1) Roll-up strategies in fragmented industries like aerospace components manufacturing
2) Leading pet food, toy, and healthcare brands that are well-positioned to capture market share
3) HealthTech platforms and services companies that are using data analytics, AI, and remote monitoring to improve patient outcomes and reduce costs

Brokers Focus
1) Capital-intensive businesses like telecommunications infrastructure providers with lenders
2) Businesses like the healthy snack food company or the home infusion nursing provider that used factoring facilities
3) Asset-heavy industries like manufacturing, distribution and healthcare that could benefit from this sale-leaseback financing structure

😲 Didn’t see that one coming

• Fort Lauderdale crane collapse victim files over $50M lawsuit against developer and contractors Read

• Republic First Bank was shut down and acquired by Fulton Bank under US regulatory directive Read

• Major hotel chains, including Hilton, Hyatt, and Four Seasons, face new antitrust lawsuit over alleged price fixing Read

• Small Business Subchapter V elections surge by 60% in April year-over-year Read

• Manhattan's 'worst landlord' indicted by DA Bragg for harassing rent-regulated tenants Read

• Ninth Circuit rules loan modifications by unlicensed lenders as violations of state usury law Read

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