💪💲 Last Week’s Lenders in $6.7 billion loans: Goldman Sachs, Bank OZK, and Gibraltar

[5 Minutes Read] Plus Equinox's $1.8 billion loan

Author

Bridge Loan Guy
March 18, 2024

Good Morning TIM Enthusiasts

Last week showcased a dynamic interplay in the realms of CRE, ABL, and Growth Cap, reflecting a market balancing ambition with prudence. Bank OZK, Blackstone, and JP Morgan led substantial deals, highlighting the continued appetite for significant investments across various sectors, from industrial and data centers to luxury resorts and multifamily developments. In a week that also illuminated the strategic moves in asset-based lending and growth capital, the spotlight shone on Equinox's $1.8 billion refinancing and Empire State Realty Trust's $715 million credit facility, demonstrating the market's confidence in high-quality assets and the sustained demand for digital infrastructure and luxury developments. Amid these substantial transactions, the real estate market faced sobering moments with a significant legal development involving a CRE investor's charges over a WeWork stock scheme and the NAR's $418 million settlement, underscoring the complexity and challenges within the financial ecosystem. We’ll give you the entire scoop....in just 5 minutes!

Let’s get into it.

Top Weekly CRE Deals

  • Bank OZK group delivers $756M for Inland Empire's development Read
    Lender: Bank OZK, BDT & MSD Partners, Construction Loan

  • Blackstone’s $600M loan empowers Aligned Data Centers' growth Read
    Lender: Blackstone Credit & Insurance, Construction Loan

  • JP Morgan’s $500M finances Beverly Hills' landmark construction Read
    Lender: JP Morgan, Construction Loan

  • Oak Row Equities secures $181M from Bank OZK for Edgewater’s tower Read
    Lender: Bank OZK, Construction Loan

  • BWE crafts a $150M Freddie Mac credit line for manufactured housing Read
    Lender: Freddie Mac, Acquisition Loan

  • Scale Lending’s $140M funds multifamily development in Brooklyn Read
    Lender: Scale Lending, Construction Loan

  • Torchlight’s $135M loan rejuvenates PCH’s retail and office complex Read
    Lender: Torchlight Investors, Refi Loan

  • Starwood’s $118M refi bolsters RXR New York properties Read
    Lender: Starwood Property Trust, Refi Loan

  • Dwight Mortgage’s $108M refi revitalizes a Brooklyn residential tower. Read
    Lender: Dwight Mortgage Trust, Refi Loan

  • Ytech's $104M from LinkVest Capital funds Brickell property development. Read
    Lender: LinkVest Capital, Refi and Construction Loan


Summary
Last week, we saw several significant financing deals close in the commercial real estate market, demonstrating the continued appetite for high-quality assets across various sectors. The Inland Empire industrial market attracted a notable $756 million financing package for the Speedway Commerce Center development, with Bank OZK and BDT & MSD Partners originating the funding. This deal highlights the region's strong demand for well-located, modern logistics properties. In the data center sector, Aligned Data Centers secured a $600 million senior secured credit facility from Blackstone Credit & Insurance to support the development of their newest and largest data center in West Jordan, Utah, emphasizing the growing importance of digital infrastructure. In the luxury resort sector, Cain International secured an impressive $500 million construction loan from JPMorgan, for the One Beverly Hills development in California. The project, one of the largest privately funded developments in the nation, will feature two residential towers, a luxury hotel, and expansive green spaces.

Bank OZK emerged as the top lender, originating significant loans for the Speedway Commerce Center industrial development ($756 million) and the mixed-use tower in Miami's Edgewater neighborhood ($181 million). The average loan size among the mentioned transactions was approximately $467 million, indicating a focus on large-scale, high-value projects. The most prominent activities were construction financing for mixed-use developments, industrial properties, luxury resort projects, and refinancing for existing assets.

Key Insights

  • Lenders remain confident in the stability and potential of high-quality assets in sought-after locations across various sectors, including industrial, luxury resorts, and data centers.

  • The Inland Empire remains a critical distribution hub, attracting significant investment in modern logistics properties.

  • Mixed-use developments, particularly those combining residential, office, and retail components, are garnering attention from lenders and investors.

 Top Opportunities/Markets:

CRE Lenders:
1) Sponsors involved in e-commerce, transportation, and supply chain management
2) Data center developers and tech companies
3) high-end hospitality projects in sought-after locations
4) Developers who are creating vibrant, live-work-play environments that combine residential, office, and retail components
5) Experienced multifamily developers building near grocery stores and health facilities

CRE Developers:
1) Consider incorporating green tech into your projects to attract environmentally conscious tenants and stay ahead of the curve.
2) Design your projects to accommodate various uses, such as coworking areas and rooftop amenities, to appeal to a broader range of tenants.
3) When scouting for new development opportunities, focus on areas with strong economic fundamentals, high barriers to entry, and a track record of resilience.

CRE Investors:
1) Keep an eye out for opportunities to invest in well-located, modern industrial assets that cater to the needs of e-commerce and supply chain businesses.
2) Consider investing in manufactured housing communities that offer affordable housing options and stable cash flows.
3) Be willing to take a patient approach with projects that have extended timelines but offer the potential for significant returns down the road.

CRE Brokers:
1) Consider carving out a niche for yourself, such as data centers or industrial properties, to differentiate your services and attract targeted clients.
2) Invest time researching economic trends, development pipelines, and financing activity in your target markets to provide valuable insights to your clients.
3) Stay up-to-date with emerging financing sources and structures to offer your clients various options and stay competitive in a changing landscape.

Top Weekly Growth Capital Deals

Top Weekly ABL Deals

  • Gibraltar sweetens legacy honey company with a $20M infusion Read
    Lender: Gibraltar Business Capital, Refi Loan

  • SLC Business Credit’s $20 Million loan brews growth opportunities Read
    Lender: SLR Business Credit, Growth Expansion Loan

  • First Business Bank’s $15M credit facility sweetens Michigan acquisition Read
    Lender: First Business Bank, Acquisition Loan

  • Republic Business Credit’s $8M loan turbocharges automotive supplier Read
    Lender: Republic Business Credit, Working Capital Loan

  • Culain Capital’s $4M packages success for consumer products firm Read
    Lender: Culain Capital

  • Utica Equipment Finance’s $3.2M lease for oil & gas equipment rental firm Read
    Lender: Utica Equipment Finance, Growth Expansion Loan

  • NJ security firm locks in $1.5M for expansion from Prestige Capital Read
    Lender: Prestige Capital, Growth Expansion Loan

  • TAB Bank’s $1.5M gears up a California logistics company Read
    Lender: TAB Bank, Growth Expansion Loan


Insight Summary

Last week, we saw robust asset-based lending and commercial finance activity, with several sizable deals closed across various industries. Equinox, the luxury fitness company, secured a $1.8 billion refinancing led by Goldman Sachs and JP Morgan to fund growth and new club openings. Empire State Realty Trust also refinanced with a new $715 million credit facility from BOA, Wells Fargo, and JP Morgan to maintain liquidity. The third largest deal was a $588 million debt financing from MUFG and SMBC for Primergy Solar's 408 MW Ash Creek Solar project in Texas, with Microsoft signing a PPA for the plant's full capacity.

New York, New Jersey, Texas, Ohio, and California emerged as hotspots for lending activity, with notable deals involving fitness, energy, financial, manufacturing, and supply chain sectors.

Based on deal activity, JP Morgan was the top lender this week with their $1.8 billion Equinox and $715 million Empire State Realty Trust refinancings. The average loan size across the top 10 deals was approximately $388 million. Refinancings to extend maturities were a major theme, but transactions also funded acquisitions and growth.

Key Insights

  • Large refinancings are occurring as borrowers look to extend maturities and shore up liquidity in an uncertain economic environment.

  • Lenders are financing niche esoteric assets like music royalties as they search for yield.

  • Renewable energy projects are securing major debt financing and offtake agreements with blue-chip corporate buyers.


💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders: 
1) Fitness chains are securing large refinancings to fund growth
2) Renewable energy projects are attracting significant debt financing and offering project finance opportunities
3) Music royalties are emerging as a viable asset class for cash-flow-based lending
4) Telecom companies are seeking acquisition financing to consolidate in a fragmented market
5) Food & beverage companies are utilizing asset-based lending to invest in manufacturing capabilities and fund expansion
6) Agricultural biotechnology firms are raising debt to scale production and drive growth


Family Offices
1) Real estate developers are securing loans for smart home and apartment complex projects, presenting co-investment opportunities
2) Industrial distributors of manufacturing supplies and metalworking products are being acquired, highlighting consolidation plays in the sector
3) Logistics companies are seeking multi-year credit facilities to expand sales and contract pipelines, signaling growth potential


Private Equity Firms
1) Aftermarket automotive suppliers are acquiring competitors and seeking financing to integrate and grow, presenting buyout opportunities
2) Security companies serving urban housing developments seek expansion capital, offering growth equity investment potential.
3) Electronics manufacturers with strong backlogs are seeking increased credit facilities, signaling a recovery in demand


Brokers
1) Asset-based lending is supporting companies in the natural foods space looking to refinance bank debt and fund growth
2) Venture debt opportunities exist for SaaS companies in the e-commerce enablement space that are experiencing high growth
3) Government contractors are leveraging invoice factoring to accelerate cash flow and fund new contract opportunities

 New Lender Programs


😲 Didn’t see that one coming

  • CRE investor faces charges in a $77M WeWork stock scheme Read

  • NAR agrees to a $418M settlement and commission overhaul Read

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