🍸💡⛏️ Biggest ABL, CRE & Growth Cap Deals: $480M Biltmore Hotel, $300M Origis Energy, $18.5M ECB

Good Morning Everyone

This week in Deals:

$1.12 billion in top 10 CRE deals
$865 million in top 7 Growth Cap deals
$38 million in top 9 ABL deals

Top CRE Lenders
Morgan Stanley, JP Morgan, Deutsche Bank, Northwestern Mutual, Bank OZK, Goldman Sachs, BentallGreenOak, New York State Teachers' Retirement System, 3650 REIT, JP Morgan Chase, Westcor Land Title Insurance Company, First Citizens Bank

Top Growth Cap Lenders
KKR, Sumitomo Mitsui Bank, Bastion Management, Deutsche Bank, Citizens Bank, WhiteHawk Capital Partners, Mountain Ridge Capital

Top ABL Lenders
Eclipse Business Capital, Wingspire Equipment Finance, MidCap Business Credit, eCapital, CapitalPlus Financial Services, SLR Healthcare ABL, SLR Business Credit, Hedaya Capital, Culain Capital Funding

This Week’s Video
Retail Apocalypse or Retail-Renaissance: https://www.youtube.com/watch?v=QO40Cv1EnSI&t=104s

🌆Top Weekly CRE Deals

• Morgan Stanley, JP Morgan, Deutsche Bank finance $480M acquisition of Arizona hotel Read

• Deutsche Bank leads $120M retail refi for Miami Worldcenter Read

• Northwestern Mutual provides $103M refi for New Jersey apartment complex Read

• Bank OZK supplies $93M construction loan for NJ industrial park Read

• San Diego office asset lands $83M refi Read

• BGO refis Savannah apartments with $79M loan Read

• Hillwood lands $70M acquisition financing for Amazon facility in South Florida Read

• 3650 REIT, JP Morgan Chase provide $62M refi on Columbus warehouse Read

• Self-storage facility secures $38M bridge loan in L.A.’s South Bay Read

• First Citizens provides $24.5M in construction financing for Texas industrial project Read

Summary
Last week saw a flurry of significant commercial real estate financing deals across the United States, with lenders focusing on a mix of property types and borrower profiles. The largest transaction was the $705 million acquisition of the iconic Arizona Biltmore hotel in Phoenix by a joint venture between Henderson Park and Pyramid Global Hospitality, backed by a $460 million loan led by Morgan Stanley.

In Miami, developers of the sprawling 27-acre Miami Worldcenter project secured a $120 million refinancing from Deutsche Bank for its retail component. Other notable deals included a $103 million refinancing for The Ivy Chatham luxury apartments in New Jersey, a $93 million construction loan for the Matrix Logistics Park, also in New Jersey, and an $82.5 million refinancing for the Sunroad Centrum Office Tower in San Diego.

Lenders focused on a variety of asset classes, with industrial and multifamily properties continuing to be the most favored. However, office, retail, and hospitality properties also received financing on a selective basis. Borrowers ranged from experienced national developers to local owners and operators, with those boasting strong track records in their respective markets garnering significant attention.

Acquisition and refinancing activity dominated the week's transactions, although construction financing was also represented. Assets with credit tenants, stable cash flows, and value-add potential attracted the most interest from lenders, who prioritized markets with high barriers to entry and limited new supply.

Deutsche Bank emerged as one of the most active lenders last week, playing key roles in the $460 million Arizona Biltmore acquisition financing and the $120 million Miami Worldcenter retail refinancing. The majority of loans appeared to be floating-rate, aligning with the bank's typical product offerings. Geographically, lending activity was concentrated in the Phoenix, South Florida, New Jersey/New York City metro, San Diego, and Columbus markets.

Key Insights

• Lenders are closely scrutinizing net operating income, rent rolls, and business plans in underwriting

• Assets with credit tenants, long weighted average lease terms, and limited near-term rollover are the most attractive

• Rising interest rates and tighter lending standards are starting to impact pricing/proceeds, but it's deal-specific

Loan Structures
Most of the loans seem to have an intermediate to long-term tenor. The Ivy Chatham apartments refinancing was a 10-year fixed rate loan, indicating lenders' willingness to offer longer-term financing for stable assets. Refi loans like the Ann Street Lofts loan had a 5-year term, which is typical for transitional assets. Construction loans likely have a 2-3 year initial term with extension options. The loan structures varied from fixed-rate perm loans like the Ivy Chatham refinancing, common for stabilized multifamily properties, to floating-rate structures like the Savannah luxury apartment loan for flexibility for transitional business plans.


Winners:

• Real estate developers with projects in pre-development or under construction in markets with strong fundamentals

• Institutional real estate investors with a value-add strategy

• Banks with strong real estate lending platforms and relationships with institutional sponsors

• Life insurance companies with conservative investment strategies
  

Losers:

• Smaller real estate owners/operators with unproven track records or properties in tertiary markets

• Real estate investors with portfolios concentrated in out-of-favor asset classes like offices or raw land

• CMBS lenders that rely on market liquidity to securitize loans

• Non-bank debt funds with a higher cost of capital

💡 Top Markets/Opportunities:

CRE Lenders Focus:
1) Luxury resort operators and investors
2) Mixed-use developments in urban core markets
3) Suburban multifamily developers and investors in high-growth markets
4) Industrial build-to-suit projects for credit tenants

CRE Developers Focus:
1) Mixed-use projects that combine luxury residential, high-end retail, and experiential dining/entertainment
2) Modern industrial facilities in strategic logistics markets near major transportation hubs
3) Redeveloping or repositioning older office properties into unique, amenitized workspaces

CRE Investors Focus:
1) Luxury resort properties in high-growth sunbelt markets
2) Industrial outdoor storage facilities near major logistics hubs
3) Distressed or underperforming office assets in prime locations, with the goal of repositioning them for alternative uses

CRE Brokers Focus:
1) Private equity firms, family offices, and other institutional investors that are actively acquiring hospitality assets
2) Industrial developers and owners looking to capitalize on the strong demand for logistics properties
3) Office owners and investors who are looking to reposition or refinance their properties in the face of changing market conditions

💸Top Weekly Growth Capital Deals

• KKR provides a $300M corporate credit facility to Origis Energy Read

• Bain Capital Specialty Finance, Inc. increases and extends its revolving credit facility Read

• Bastion Management closes $150M debt facility with Sezzle Read

• Aquila Air Capital upsizes term loan facility by $100M Read

• Citizens closes $55M financing facility for Bluberi Gaming USA Read

• WhiteHawk Capital Partners provides credit facility to MediaCo Read

• Mountain Ridge Capital provides a $15M credit facility to leading U.S. textile wholesaler Read

Top Weekly ABL Deals

• Eclipse Business Capital closes $18.5M senior secured credit facility to mining company Read

• Global pharmaceutical services company secures $12M in financing from Wingspire Equipment Finance Read

• MidCap Business Credit LLC completes $5M asset-based credit facility to a manufacturer and distributor of cryogenic storage and transportation equipment Read

• eCapital secures $3.5M facility to support management buyout for renowned book publishing company Read

• CapitalPlus Financial Services facilitates $3M financing to support Louisiana contractor Read

• SLR Healthcare ABL provides $3M for a skilled nursing operator Read

• SLR Business Credit provides $2.5M credit facility to transportation, distribution, and logistics company Read

• Hedaya Capital provides $1M facility to an innovative shoe brand Read

• Culain Capital Funding closes $1M for Texas workforce solutions provider Read

Summary
Last week, the lending landscape witnessed a surge of activity across various sectors, with prominent deals in renewable energy, specialty finance, gaming, and media. KKR provided a substantial $300 million corporate financing facility to Origis Energy, a leading renewable energy and decarbonization solution platform, to support developing and constructing their solar and storage project pipeline. Bain Capital Specialty Finance also made headlines by increasing commitments under its senior secured revolving credit facility to $855 million, attracting new lenders, and extending the maturity date to 2029. The gaming industry also saw significant movement, with Bluberi Gaming USA closing a $55 million financing facility with Citizens acting as Left Lead Arranger. This new financing will enable Bluberi to support the rapid roll-out of its innovative gaming content to new customers and jurisdictions.

The most prominent activity observed in the content is financing growth initiatives and strategic acquisitions across various sectors. Many of the deals, such as Bastion Management's $150 million senior debt and WhiteHawk Capital Partners' $45 million term loan facility, were focused on providing capital to support companies in expanding their operations, pursuing new opportunities, and completing strategic transactions. KKR stands out as the top lender, having provided a substantial $300 million corporate financing facility to Origis Energy. The cities and properties that saw the most lending activity were Miami, Boston, and Las Vegas. Other notable locations include Dallas and the Upper Midwest. The assets that received significant attention from lenders included solar and storage projects, gaming content and technology, media assets, and pharmaceutical manufacturing and packaging equipment.

Key Insights

• Private credit investment managers are increasingly focusing on asset-based financing solutions

• The aviation industry is seeing a resurgence in financing

• Specialty finance companies are playing a crucial role in supporting businesses during transitional periods, such as management buyouts
  

Loan Structures
Revolving credit facilities, term loans, and asset-based lending arrangements emerged last week as the most common loan structures. Bain Capital Specialty Finance's $855 million senior secured revolving credit facility exemplified the popularity of revolving credit facilities, which offer borrowers the flexibility to withdraw, repay, and redraw funds as needed. Term loans, such as Eclipse Business Capital's $18.5 million senior secured credit facility to a mining company, provided targeted funding for specific projects or acquisitions. Asset-based lending, including revolving lines of credit and factoring, was evident in deals like SLR Business Credit's $2.5 million revolving line of credit to a Southern California trucking and logistics company and eCapital's $3.5 million factoring facility for a book publishing company.

Winners:

• Renewable Energy Developers

• Pharmaceutical Services Companies

• Private Credit Investment Managers

• Asset-Based Lenders

Losers:

• Traditional Brick-and-Mortar Retailers

• Fossil Fuel-Based Energy Companies

• Traditional Banks

• Lenders Focused on Specific High-Risk Sectors

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus 
1) Renewable energy developers
2) Specialty finance companies
3) The Gaming industry
4) Pharmaceutical services companies

Family Offices Focus
1) Aviation sector
2) The mining sector
3) Textile wholesalers

Private Equity Firms Focus
1) Footwear companies
2) Workforce solutions providers in the marine, offshore, and industrial construction industries
3) Trucking and logistics companies serving ports and airports

Brokers Focus
1) The book publishing industry
2) Trucking and logistics companies
3) Manufacturers and distributors of specialized equipment

😲 Didn’t see that one coming

• Red Lobster files Chapter 11, receives $100M debtor-in-possession financing commitment Read

• RXR defaults on $315M loan secured by 340 Madison Avenue in Manhattan Read

• Graceland faces foreclosure auction, but Presley family says it's a scam Read

• Inter Milan taken over by Oaktree after owner fails to repay debt Read

• Cancer victims sue J&J over ‘fraudulent’ bankruptcies Read

• Arbor Realty moves to foreclose on another Houston complex after $56M default Read

• Freddie Mac calls halt on new loans from appraiser BBG Read

• Zachry Holdings, a San Antonio construction company, files for bankruptcy Read

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