⛽⚡💲 Last Week’s Top $7.2B Deals You Should Know About: Blackstone, Allison, Par Pacific

[5 Minutes Read] Plus Warner Bros $475 Million Refi

Author

Bridge Loan Guy
March 25, 2024

Good Morning TIM Enthusiasts

Last week unveiled a multifaceted tapestry in CRE, ABL, and Growth Cap domains, capturing a market navigating the tightrope between aspiration and caution. In CRE, Blackstone refinanced over 100 industrial properties with a hefty $2.35B package, while Warner Bros.' new HQ secured a blockbuster $475M mortgage. ABL saw Par Pacific boosting commitments to $1.4B and Kyte revving up with $250M for fleet expansion. Growth Cap spotlighted Allison Transmission's savvy $750M revolver increase and Kobalt Music's $266.5M securitization crescendo and $450M term loan. However, the specter of default loomed, with multifamily loans seeing a concerning 16% loss rate spike and a staggering $525B in apartment loans maturing by 2028. As we peer behind this intricate financial ballet curtain, let's spotlight the stars, the understudies, and those rewriting the script....all in a mere 5-minute act!

Let’s get into it.

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Top Weekly CRE Deals

Summary
Last week, we saw significant commercial real estate financing activity across the United States. Private equity giant Blackstone refinanced a massive $2.35 billion debt package on a portfolio of over 100 industrial properties spanning 11 states, with a heavy concentration in Miami-Dade County, Florida, valued at $477 million. Warner Bros.'s new 800,000-square-foot headquarters in Burbank, California, secured an impressive $475 million fixed-rate mortgage, marking the first single-asset CMBS office loan for one borrower since 2022. Bridge Industrial landed a $413 million construction loan for a 2.48 million square foot logistics park development near the Port of Tacoma in Washington. Last week's three largest deals demonstrate robust lender appetite for industrial, entertainment and logistics assets in major markets.

Wells Fargo appears to be the most active lender, participating in the $2.35 billion Blackstone refinancing, the $475 million Warner Bros. headquarters financing, and five luxury Columbus Square $370 million refinancing. The average loan size across the mentioned deals is approximately $378 million, skewed by the large Blackstone and Warner Bros. transactions. The most prominent activity appears to be refinancing, with several major loans being refinanced or extended, followed by construction financing for new development projects.

Key Insights

  • Industrial and logistics properties continue to attract significant financing, with large portfolios and developments securing substantial loans.

  • Mixed-use projects, particularly those combining hotel, office, and retail components, are securing sizable refinancing deals.

  • Multifamily developments, especially those targeting workforce housing, are obtaining construction loans in high-growth markets like Florida.

 Top Opportunities/Markets:

CRE Lenders:
1) Industrial and logistics properties are red-hot right now
2) Entertainment and media companies with strong real estate assets and credit are attractive lending prospects
3) Mixed-use properties in major markets can still be solid lending opportunities if they have the right location and tenant mix
4) Multifamily developments in high-growth Sun Belt markets are attracting construction financing
5) Retail centers anchored by essential businesses like grocery stores are still bankable, particularly in major metros

CRE Developers:
1) The Tacoma/Seattle market is ripe for more industrial development
2) Developing mixed-use properties in dense urban markets can be challenging but rewarding
3) Multifamily (garden-style and mid-rise apartment projects) development is booming in Sun Belt markets like South Florida

CRE Investors:
1) Acquiring industrial portfolios in high-growth markets can provide strong and stable cash flows
2) Well-located retail centers with essential tenants like grocery stores can still be solid investments
3) Developing and owning highly-amortized multifamily properties in Sun Belt markets can yield attractive returns

CRE Brokers:
1) Reach out to industrial developers in major port and hub markets in arranging debt capital for their new projects.
2) Contact grocery-anchored and necessity-based retail center owners to gauge their refinancing needs.
3) Target multifamily developers in South Florida and other Sun Belt metros to offer your construction financing expertise.

Top Weekly Growth Capital Deals

Top Weekly ABL Deals


Insight Summary

Last week, we saw significant lending activity across various sectors, with deals ranging from $7.5 million to $1.4 billion. The activity was spread across the country, with notable deals in Houston, TX (Par Pacific's $1.4 billion ABL), Indianapolis, IN (Allison Transmission's $650 million revolving credit facility), and New York, NY (Kobalt Music Group's $450 million loan). Lenders focused on borrowers in energy, manufacturing, music publishing, biotech, and artificial intelligence industries. Refinancing, growth capital, and working capital were the primary uses of proceeds.

Commercial banks were the most active lenders this week, leading the $1.4 billion ABL facility for Par Pacific Holdings and the $650 million revolving credit facility for Allison Transmission. These sizable refinancing transactions demonstrate the capacity and appetite of banks to provide liquidity to large, established companies.

Refinancing activity was the most prominent theme, with Par Pacific, Allison Transmission, and Kobalt Music Group all securing new credit facilities to replace existing debt, extend maturities, and increase borrowing capacity. This trend suggests that companies are proactively managing balance sheets and capitalizing on lender demand to optimize their capital structures.

Key Insights

  • Lenders are providing sizable credit facilities secured by assets like accounts receivable, inventory, equipment, real estate, and even music royalties.

  • Industries that are attracting significant financing include music/entertainment, biotech/pharma, mobility/logistics, manufacturing, and artificial intelligence.

  • Refinancings and maturity extensions are common themes, with many companies taking advantage of favorable credit markets to optimize their capital structures and reduce borrowing costs.


💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders: 
1) Companies in high-growth sectors like biotech and gene therapy. These companies can be attractive lending prospects with strong IP and regulatory momentum.
2) Tech-enabled platforms (in the mobility and logistics sector) disrupting transportation
3) Independent publishers and songwriters looking to monetize their catalogs.
4) Growing online retailers with loyal customer bases
5) Specialty manufacturing with strong OEM relationships, particularly in aerospace and defense, is an attractive sector
6) Midstream and downstream companies with stable cash flows and tangible assets


Family Offices
1) Explore investing in or acquiring promising AI startups developing innovative technologies with broad commercial applications in the healthcare, finance, and manufacturing sectors
2) Acquire or invest in independent content creators, production companies, and distribution platforms benefiting from the shift to streaming
3) Target investments in electric vehicle manufacturers, battery technology companies, and charging infrastructure providers


Private Equity Firms
1) Seek out investments in companies providing innovative mobility solutions, such as ride-sharing platforms, autonomous vehicle technology, and smart city infrastructure
2) Investigate opportunities to acquire or invest in Business Development Companies focused on middle-market lending, particularly those with expertise in recession-resilient sectors like healthcare, technology, and consumer staples
3) Target acquisitions of digital gaming platforms, content providers, and affiliate marketing companies


Brokers
1) Target other metal service centers, fabricators, and processors looking to optimize their inventory and working capital
2) Focus on sourcing financing for other transportation and logistics providers, particularly those serving essential industries like food and beverage, healthcare, and e-commerce
3) Focus on arranging financing for other manufacturers of precision components, tools, and assemblies, especially those serving the aerospace, defense, and medical device sectors

 New Lender Programs


😲 Didn’t see that one coming

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  • Lender initiates foreclosure on a $350M loan in NY's Garment District Read

  • The Texas Real Estate Commission alerts to a large leasing fraud scheme Read

  • Petersen Health Care opts for a voluntary Chapter 11 bankruptcy filing Read

  • $113M foreclosure lawsuit targets Wynwood office following a CMBS debt Read

  • Indiana & West Virginia enact laws to curb 3rd party litigation financing Read

  • Loan maturities loom over 58,000 multifamily properties in the next 5 years Read

  • Multifamily loan losses surge as debts from 2021 begin to mature Read

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