🏝️ Industrial & Life Sciences Surge, Mega-Loans for Tech, and Florida Fortunes

Good Afternoon TIM subscribers:

We are moving to Tuesday morning (10am) to give you better coverage of all events from the previous week. You get news on all loan CRE, GC, and ABL closings, lender insights, market summaries, and analyses from Monday to Friday.

Below is an updated rundown with last Thursday's and Friday's news.

Last week, we saw: a robust lineup of CRE and ABL deals that defied economic headwinds, especially in the industrial and life sciences sectors, slowing multifamily developments, a lender merger that's set to shake up the fintech landscape, and an unexpected loan default that rocked NYC's office market. We also have actionable insights on navigating last week’s market volatility. PLUS a new bridge lender, prizes, and the world’s tallest building (for now)…in just 5 minutes!

Let’s get into it.

Top Weekly CRE Deals

• PGIM Real Estate lends $455M to Alere Property Group (More)

• Bank of China loans $315 million to Lendlease/Ivanhoe JV (More)

• Brookfield provides $200 million to Chirisa’s Data Center (More)

• PGIM Real Estate gives $115M Refi loan to Barings Real Estate (More)

• BHI lends $92M to the Jay Group on Inwood Project (More)

• Fifth Third Bank provides $82.8M construction loan to Mill Creek (More)

• Northwind Group loans $70 million to Southern Land Company (More)

• CIM Group closes $63.87 million to two Florida hotels (More)

• MF1 Capital refinances Harlem multifamily with a $69M loan (More)

• EverWest secures $61M for its industrial portfolio (More)

  
  EXTRA SLICE

• DCHFA offers $51 million for D.C. project (More)

• $43.2M Refi loan from Poppy Bank lends (More)

• CrossHarbor Capital Partners’s $38M construction loan (More)

• First Citizens provides $29M loan (More)

• Builders Capital’s $24M construction loan (More)

• SVB offers $14.5M Refi loan (More)

• Bloomfield Capital provides $9.5M loan (More)

Insight Summary
In a climate rife with economic uncertainty, investors are zeroing in on specific sectors, such as industrial, life sciences, and data centers, as safe harbors for capital. Moreover, multifamily developments continue to draw investment, particularly in regions experiencing growth. However, it's not all smooth sailing: new projects, especially those in high-cost urban areas like New York City, grapple with financing challenges without tax incentives.

▲ Winners:
◦ Industrial developers/investors are targeting markets where tenant demand is high
◦ Datacenter investors are developing properties in undersupplied markets
◦ Lifescience investment is booming, where capital is sought for growing clusters for lab spaces.

▼ Losers:
◦ Hotel investors face ongoing obstacles with depressed revenues amid event and business travel still lagging
◦ Office investors confront weak demand, forcing turnaround situations, especially for class B/C buildings.
◦ Multifamily investors may get squeezed in some regions by rising construction costs and slowing rent growth.

Top Weekly ABL and Equipment Deals

• Golub Capital spearheads a $3.4B unitranche facility for Hyland Software (More)

• Texas Bank delivers $1.2 billion term loan to HighPeak Energy (More)

• HSBC Private Credit Bank arranges $300 million facility for The Prax Group (More)

• Santander Bank closes $250 million AB Revolver with Wind Turbine & Energy Cables Corp (More)

• Summit Hotel Properties finalizes $200M JV credit facility (More)

• eCapital completes $160M+ in ABL deals this summer (More)

• Bank of America secures $100 million credit facility for Enfusion (More)

• HSBC Bank and TD Bank provide a $50MM credit facility to Stampede Drilling (More)

• Temerity Strategic Partners provides $50M GC to Ashcroft Capital (More)

• SAC Partners grants $44 million to Allstar Marketing Group (More)

  
  MORE TOPPINGS

• $40M from SLR Credit Solutions (More)

• Siena Lending Group delivers $37 million (More)

• Rosenthal’s $15M in multiple ABL deals (More)

• Aequum Capital provides $9M (More)

• LSQ originates $5M (More)

• Safe Harbor Financial offers $3M (More)

Insight Summary
Major corporations like HighPeak Energy and Hyland Software are securing large refinancings, showing lenders remain active for creditworthy borrowers. However, banks are pulling back on financing for less-proven businesses, even profitable ones, opening opportunities for alternative lenders. Companies should address maturities early and highlight strengths to lenders while exploring diverse options like asset-based lending. With economic uncertainty, only the most robust credits will find easy financing, so businesses should proactively shore up finances.

▲ Winners:
◦ Energy firms have the opportunity to obtain large credit facilities using reserves and assets
◦ Private lenders (ABL) can pick up middle-market business as traditional banks turn cautious.
◦ Tech and software companies can still secure growth capital

▼ Losers:
◦ Distressed firms may face rejection as lenders get defensive
◦ Startups and high-risk borrowers will see tougher requirements
◦ Slowing sectors like retail and hospitality may have limited access to capital.

Top Lender Credit Facilities

• H.I.G. Capital (Whitehorse Capital is a debt lender) closes $5.5 billion fund (more)

• Pathlight Capital upsized its credit facility to an astounding $200.6MM (more)

• AP Equipment Financing secures a $200 million credit facility (more)

• Leonid Capital Partners locked in a $200 million loan (more)

• Unlock Technologies secures a $100 million revolving credit facility (more)

• Healthcare Funding Partners receives a $100 million boost from Post Road Group (more)

• XS Financial closes $15 million secured credit facility (More)

• Keybank loans $10 million to a CDFI (More)

Insight Summary
Prominent private equity groups and niche lenders have amassed significant funds and credit lines, showcasing that capital is still accessible despite broad uncertainties. The closing of H.I.G.'s fund, significantly above its target, suggests a bullish sentiment among institutional investors, spanning from the U.S. to Latin America. Pathlight's repeated dealings with Franchise Group hint at a growing trend of specialized financing for retail sectors.

▲ Winners:
◦ With H.I.G.'s fund focusing on U.S. middle market companies, there's an opportunity for real estate developers and investors
◦ Equipment lenders like AP Equipment Financing's move signals a robust equipment financing sector
◦ The emphasis on tech and innovation suggests a favorable environment for AI-driven crypto ventures

▼ Losers:
◦ With the economic shifts, there might be stricter scrutiny and lending terms for startups and high-risk borrowers
◦ Retail and Hospitality sectors might face challenges with cautious lenders, especially in the current economic climate
◦ With lenders becoming more defensive, distressed firms might face hurdles in securing financing.

Summary
After reviewing numerous articles, several trends emerge: Industrial remains a safe haven for investors despite economic uncertainty. Multifamily fundamentals are still positive, but rent growth is slowing in some markets as new supply delivers, requiring close monitoring. While traditional office spaces grapple with challenges, the life sciences sector is booming per JLL’s bullish assessment, especially in hubs like Boston and San Francisco. Overall, investors continue to seek recession-proof assets even as CBRE hints at a potential peak in rental demand due to slowing growth in some markets.

Key Takeaways
The industrial sector remains a desirable and resilient asset class for strategic/defensive investors. Niche lenders and savvy investors with cash on hand stand to gain as banks take a step back - but only if they navigate risks with finesse. The multifamily sector accommodates new supply well, but localized markets are experiencing declining rent growth, signaling a potential peak. Finally, life sciences developments continue rapid expansion despite biotech funding cool-down.

The multifamily sector is absorbing new supply well overall, but localized markets are experiencing slowing rent growth, signaling a potential peak.

Biggest Impact
⮞ Construction lenders have ample industrial projects in the e-commerce and logistics sectors, given tenant demand
⮞ Bridge lenders have opportunities to offer rescue financing for office conversions and distressed assets
⮞ Net lease investors can benefit from pharmacies and convenience stores businesses amid recession fears
⮞ CMBS lenders might face mounting defaults as loans mature and borrowers struggle to refinance

NOTABLE LENDER MERGER

Breakout Capital and 12Five Capital are joining forces, creating a powerhouse in the fintech and commercial finance space. This merger, backed by Altriarch Commercial Finance, is set to revolutionize how small businesses access financial products, from term loans to asset-based lending. Great news for the ABL community, so send them your applications.

😲 DIDN’T SEE THAT ONE COMING

• Miami Developer allegedly defaults on a $27M construction loan from City National Bank (More)

• Shorenstein Properties defaults on a $350M loan in a 1.1M SF building (More)

• Houston Apartment investor defaults on $20M loan from Prudential Affordable Mortgage Co. (More)

🤵 LENDER LOUNGE

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

Time to Close: 3-5 weeks but can be expedited
Paperwork Required for LOI: Varies by deal with a summary application
Min to Max Loan: $3M-$30M (sweet spot is $5M to $25M)
Min FICO Score: None
Interest Range: 7% to 12%
Loan-To-Value: Up to 75%
Origination Fee: 1-4 pts
Due-Diligence Fee: varies
Collateral Requirements: Everything except single-family homes, land, or ground up construction
Repayment Terms: Interest-only for 12-18 months
Pre-Payment Penalty: Varies by deal
Extension of loan: Yes
Geography: Nationwide except Nevada
Refinance into a longer-term loan: No, just bridge, pref, and mezz

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We would love your feedback on what information you want more of. If you have anything interesting to share or a deal that we can help with, reach out to us by sending us an email at [email protected]. Thank you for reading, and enjoy the rest of your week.