🛎️🌴📊 Jaw-Dropping Deals You Can't Miss: $575M Diplomat Hotel, $400M Wyndham Hotel, $31.5M Dynata

Good Morning Everyone

This week in Deals:

$1.15 billion in top 10 CRE deals
$870 million in top 8 Growth Cap deals
$49 million in top 6 ABL deals

Top CRE Lenders
Citi Real Estate Funding, German American Capital, TD Miami Beach Mezz LLC, PPIB Credit Investments III, KKR, Goldman Sachs, First Citizens Bank, Affinius Capital, BridgeCity Capital, Trez Capital

Top Growth Cap Lenders
Wells Fargo, Hancock Whitney Bank, JPMorgan, Sunflower Bank, Third Coast Bank, Goldman Sachs, CIT Northbridge Credit, Silicon Valley Bank, Trinity Capital, CIBC Innovation Banking, First Merchants Bank, Carver Bancorp

Top ABL Lenders
Axiom Bank, Bank of Ann Arbor, Wintrust Receivables Finance, LSQ, Oxford Commercial Finance

This Week’s Video
Top 10 Private Credit Deals: https://youtu.be/iuoIwRO7YZo

🌆Top Weekly CRE Deals

• Trinity and Credit Suisse secure $575M to refinance Diplomat Resort in South Florida Read

• KKR provides $101M refinancing for AMCAL’s The Clarendon Read

• Goldman Sachs makes $97M construction financing for Palmetto Apartment Development Read

• First Citizens Bank provides $74M for a multifamily building in Downtown Brooklyn Read

• Affinius Capital provides $70M refinancing for a Miami luxury apartment tower Read

• Affinius Capital makes $58M acquisition loan for a San Bernardino industrial property Read

• BridgeCity lends $51M for Brooklyn office-to-residential conversion Read

• MSquared obtains $48M financing package for Seattle apartment project Read

• First Citizens Bank provides $31.5M to a fashion retailer for warehouse and distribution center purchase Read

• JLM taps $29.4M loan from Trez Capital for Albuquerque BTR community Read

Summary

Last week, the commercial real estate lending market surged with robust activity, marked by several significant deals across various property types and locations. Leading the pack was a $575 million refinancing of the Diplomat Beach Resort in Hollywood, FL, facilitated by Citi Real Estate Funding and German American Capital. This was followed by a $101 million senior bridge loan from KKR to the owners of The Clarendon apartment complex in Los Angeles, and a $97 million construction financing secured by The Mahaffey Apartment Company from Goldman Sachs for The Carlton at Robinson Gateway in Palmetto, FL.

Lenders predominantly focused on multifamily properties, especially luxury apartment complexes and new developments. Borrowers ranged from well-established real estate investment firms to regional developers, underscoring the diverse landscape of the commercial real estate lending market. This diversity reflects lenders' confidence in the long-term viability of the multifamily sector.

Refinancing activities took center stage, followed by construction and acquisition transactions. Prominent lenders such as Goldman Sachs, Affinius Capital, and First Citizens Bank played key roles, providing substantial financing for multifamily and industrial projects. Significant lending activity was noted in high-growth regions like South Florida (Hollywood and Miami), the San Fernando Valley in Los Angeles, and Downtown Brooklyn.

Key Insights

• Multifamily properties remain a primary focus for lenders, with significant financing provided for both existing assets and new developments

• Lenders are targeting high-growth areas like South Florida, the San Fernando Valley, and Downtown Brooklyn

• Established real estate investment firms and regional developers are securing substantial loans, highlighting the diversity of borrowers in the market

Loan Structures
Shorter-term loans with initial terms of around two years have become a common feature in the current commercial real estate lending market. This trend is highlighted by the $452 million first-lien loan for the refinancing of the Diplomat Beach Resort and the two-year, floating-rate senior bridge loan provided by KKR for The Clarendon apartment complex. Lenders are demonstrating flexibility by offering various loan structures, including senior loans, mezzanine financing, and construction loans, to meet the specific needs of borrowers. Although specific details on loan-to-value (LTV) ratios and covenants were not disclosed, the substantial loan amounts and the participation of major lenders such as Citi, KKR, and Goldman Sachs indicate that the properties likely hold strong valuations and that the terms are within acceptable ranges for their respective property types and locations.


Winners:

• Real estate developers and investors focused on multifamily properties in high-growth areas

• CRE investment firms with strong track records and high-quality assets

• Large, established lenders like Citi Real Estate Funding, German American Capital, KKR, and Goldman Sachs
  

Losers:

• Developers and investors focused on secondary or tertiary markets

• Developers with projects in less desirable locations or those with limited experience

• Smaller regional lenders

• Lenders with limited resources or a narrow focus

💡 Top Markets/Opportunities:

CRE Lenders Focus:
1) Experienced real estate investment firms
2) Developers with projects in high-growth areas
3) Acquisition and renovation of existing multifamily properties
4) Financing office-to-residential conversions

CRE Developers Focus:
1) Opportunities to develop build-to-rent communities
2) Developing mixed-use projects that incorporate retail and parking
3) Develop all-electric, sustainable multifamily properties

CRE Investors Focus:
1) Luxury apartment buildings in Downtown Brooklyn or Miami
2) Office-to-residential conversions in emerging neighborhoods
3) Mixed-income multifamily developments in high-growth areas

CRE Brokers Focus:
1) Experienced developers, title insurance companies, real estate attorneys, and environmental consultants
2) Real estate investment firms, property appraisers, and insurance brokers
3) Developers focused on office-to-residential conversions, zoning and permitting consultants, and adaptive reuse architects.

💸Top Weekly Growth Capital Deals

• Wells Fargo arranges $400M senior secured term loan repricing and upsize for Wyndham Hotels & Resorts Read

• Gateway Fiber pursues market expansion with $175.5M debt financing Read

• Peloton completes $100M financing from Goldman & JPM Read

• CIT Northbridge Credit provides $75M to Cisco Equipment Rentals Read

• Silicon Valley Bank and Trinity Capital provide $63M warehouse facility to Denim Read

• CIBC Innovation Banking provides a $30M revolving credit facility to Shorelight Read

• Creative Realities closes on a new $27M revolving credit facility Read

• Carver Bancorp announces $25M revolving loan facility with NY Green Bank for building decarbonization projects in NYC Read

Top Weekly ABL Deals

• Dynata secures DIP financing after successfully prepackaged Chapter 11 first-day hearing Read

• Axiom Bank announces $4.625M factoring facility for a transportation and logistics company Read

• Bank of Ann Arbor ABL Group closes $4.5M line of credit with a consumer products packager Read

• LSQ creates a $3M invoice finance facility for an NJ-based aerospace manufacturing firm Read

• Oxford Commercial Finance provides $2.5M ledgered line of credit to a logistics company Read

Summary
Last week, the lending market saw a flurry of significant activity, with several high-profile deals spanning various sectors. Wyndham Hotels & Resorts successfully repriced its existing $1.1 billion Senior Secured Term Loan B Facility, increasing it by $400 million to $1.5 billion at a competitive interest rate of SOFR plus 1.75%. Peloton Interactive also made waves with a comprehensive refinancing effort, raising $1 billion through a new five-year term loan facility and $350 million through a convertible senior notes offering. The proceeds were strategically used to repurchase existing debt, enhance financial flexibility, and position the company for sustainable growth. In telecommunications, Gateway Fiber, a fiber-to-the-home internet provider, secured an impressive $175.5 million in debt financing, surpassing its initial fundraising target.

Refinancing was the dominant activity, with several companies, including Wyndham Hotels & Resorts and Peloton Interactive, capitalizing on favorable market conditions to reprice and upsize existing debt facilities. This resulted in interest expense savings and improved financial flexibility. JP Morgan emerged as a key player, participating in two major transactions. The firm acted as a joint book-runner for Wyndham Hotels & Resorts' $1.5 billion Senior Secured Term Loan B Facility and was involved in Peloton Interactive's holistic refinancing, which included a new $100 million five-year revolving credit facility. These deals underscore JP Morgan's strong market presence and ability to support large-scale financing for well-established companies. Last week, lenders focused on growth-oriented companies across diverse geographies, with notable transactions in Orlando, New York, and various states including Missouri, Minnesota, and Massachusetts.

Key Insights

• Growth capital deals dominated the lending landscape, with companies seeking substantial funding to support expansion plans and drive long-term growth

• The telecommunications sector is experiencing increased activity, as lenders support companies looking to expand fiber-to-the-home internet networks in key markets.
  

Loan Structures
As we delve into the recent transactions in the private credit market, a clear picture emerges of a lending landscape characterized by longer-term commitments, higher leverage tolerance, and flexible covenant structures. Lenders are demonstrating a willingness to offer five-year tenor facilities, as seen in Peloton Interactive's term loan and revolving credit facility, and are comfortable with larger transaction sizes, such as Wyndham Hotels & Resorts' $1.5 billion Term Loan B Facility and Gateway Fiber's $175.5 million debt financing. The diverse mix of term loans, revolving credit facilities, and convertible notes highlights the array of options available to borrowers seeking to tailor their financing to their specific needs and objectives.

Winners:

• Telecommunications providers

• Electric vehicle charging station infrastructure providers

• Large commercial banks

• Community development financial institutions

Losers:

• Competitors of well-funded companies

• Businesses in oversaturated markets

• Lenders focused on traditional sectors

• Smaller regional banks

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus 
1) Hospitality companies
2) Telecommunications providers
3) Freight brokers
4) Businesses involved in electric vehicle charging station infrastructure development and deployment

Family Offices Focus
1) Companies that provide digital signage and media solutions
2) Logistics companies specializing in equipment rentals
3) Third-party logistics (3PL) companies

Private Equity Firms Focus
1) Technology-forward factoring partners for freight brokers
2) Companies specializing in the development and expansion of fiber-to-the-home internet networks
3) Manufacturers and distributors of merchandise and services to retailers and manufacturers

Brokers Focus
1) businesses in the consumer products packaging industry
2) Aerospace manufacturers
3) Companies specializing in digital signage experiences for enterprise-level networks

😲 Didn’t see that one coming

• RMR and AEW’s downtown D.C. office slated for foreclosure Read

• Vanbarton Group defaults on $87.5M loan at its own headquarters Read

• Lender moves to foreclose on an incomplete hotel in Allen after $9M loan default Read

• CA Ventures faces two new lawsuits and is behind on $32M debt for another property Read

• Michigan Avenue landlord hit with $33M foreclosure Read

• A major student-loan company accused of illegally collecting payments from borrowers whose balances were wiped out through bankruptcy Read

• New York truckers file lawsuit to halt congestion pricing Read

• Labor law firms file class action lawsuit against Lawrence Equipment Read

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