NYC Luxury Condo Refi Tops This Week's Loans: Extell $620M, Brightview $325M, Spruce $130M

Good Morning Everyone

This week in Deals:

$1.78 billion in top 10 CRE deals
$318 million in top 5 Growth Cap deals
$602 million in top 4 ABL deals
$2.10 billion in top 10 International deals

Top CRE Lenders
JVP Management, Apollo, RXR, Bank of New York Mellon, Capital One, New York City Housing Development Corporation, New York City Department of Housing Preservation and Development, New York State Energy Research and Development Authority, New York City Acquisition Fund, New York State Homeless Housing and Assistance Corp., PGIM, Madison Realty Capital, SteepRock Capital, Invictus Real Estate Partners, New York Life Investments, and Nationwide Life Insurance Co.

Top Growth Cap Lenders
Barings, CommonView Capital and Sandton Capital Partners (jointly), UMB Capital Finance, and Avenue Capital Group

Top ABL Lenders
PNC Bank, Post Road Equipment Finance, and The Hedaya Capital Group.

Top International Lenders
ICO, HSBC, Credit Agricole CIB, Natixis CIB, Santander CIB, Societe Generale, BBVA, ABN AMRO, BNP Paribas, CIBC, Mizuho, Rabobank, Nordea Bank, DNB Sweden AB, Aktiebolaget Svensk Exportkredit, Ares Management Corp, Royal Bank of Canada, Bank of Montreal, National Bank of Canada, Canadian Imperial Bank of Commerce, Bank of America, Bank of Nova Scotia, Desjardins Bank, Deutsche Zentral-Genossenschaftsbank (DZ BANK), Westpac Banking Corp, Swedbank, Runway Growth Capital, European Investment Bank, and Landsbankinn.

Lender of the Week
HSBC-Syndicate Member of Zelestra €535M Loan and El Dorado Gold $350M Loan

🌆Top Weekly CRE Deals

• JVP Management provides a $620M refi for Extell’s UWS luxury tower - Read

• Affordable housing development at Greenpoint Hospital site lands $235M financing - Read

• Kushner scores $295M construction loan for 1 Journal Square - Read

• Breaking Ground pays $172M for Upper East Side dorm-turned-migrant shelter - Read

• Dallas investor buys Delray Beach, Fla., rental for $112M with $92M financing - Read

• PGIM provides $148M refi on multifamily tower in downtown Miami - Read

• Madison Realty Capital, SteepRock lend $71M refi South Florida apartments - Read

• Invictus Real Estate provides $69M bridge loan for Brooklyn apartment complex - Read

• Hal Fetner drops $63M on Manhattan apartment tower with $36M financing - Read

• Whitestone REIT secures $56M loan to pay down floating-rate debt - Read

Key Transactions

• T-Max Lending's $50.6 million construction loan for a luxury multifamily project in Jamaica Estates, NY, featuring a 7-year term with straight amortization and a high fixed interest rate

• Similarly, Gantry secured a 20-year, fixed-rate loan through a life insurance company for Haagen Co.'s Goodyear Centerpointe retail power center in Arizona. The loan has a 20-year amortization and a prepayment stepdown after 10 years.

• Other significant deals include J.P. Morgan Asset Management's $148 million five-year, fixed-rate refinancing for a luxury multifamily tower in Miami, provided by PGIM, and Whitestone REIT's $56.3 million loan from Nationwide Life Insurance Co., featuring a fixed interest rate of 6.23% and a 30-year amortization schedule.

Loan Structures
In today's commercial real estate financing landscape, caution is the watchword. Loan tenors are varied, ranging from 5 to 20 years. Still, most lenders are gravitating toward the 7-10-year sweet spot - long enough to provide stability but not so long as to overexpose themselves in an uncertain market. Loan-to-value ratios are conservative, typically 60-70% for stabilized assets and even lower for construction loans. Lenders are also tightening covenants and scrutinizing financials, business plans, and sponsor experience. The shift towards fixed-rate loans, exemplified by Whitestone REIT's 6.23% deal, underscores a market-wide preference for certainty over potential savings. This conservative approach reflects a broader recalibration in the CRE lending market, where quality and track record are becoming as crucial as the numbers themselves.

Tips For Borrowers

1. Consider longer-term, fixed-rate loans to protect against potential interest rate volatility, as seen in the Goodyear Centerpointe.

2. Explore financing options from diverse lender types, including life insurance companies and specialized CRE lenders, which may offer more favorable terms than traditional banks.

3. For construction projects, look for lenders willing to provide longer-term financing beyond the construction phase, as T-Max Lending's 7-year term exemplifies.

4. Leverage strong property fundamentals and location to secure better loan terms, as demonstrated by the high occupancy rates in the J.P. Morgan refinancing deal.

5. Consider including green energy benefits or other ESG factors in your project to access better financing terms, as seen in Interface Properties' Freddie Mac loan for Brantley Pines Apartments.

6. For larger projects, explore the possibility of combining senior and mezzanine debt to achieve higher leverage, as illustrated by the Kushner Companies' $295 million construction loan for their Jersey City project.

💡 Top Markets/Opportunities:

CRE Lenders Focus:
1) Affordable housing conversion
2) Luxury multifamily developments
3) Mixed-use developments
4) Self-storage developers and operators

CRE Developers Focus:
1) Developing mixed-use projects in growing secondary cities, which could also benefit local construction suppliers and subcontractors
2) Explore partnerships with life insurance companies, as this could lead to opportunities in developing build-to-suit projects or constructing properties that align with their investment criteria
3) Specialize in complex, mixed-use developments

CRE Investors Focus:
1) Acquire underutilized properties in urban areas for conversion
2) Invest in self-storage facilities
3) Senior housing market as it might open up opportunities to invest in healthcare REITs or companies providing specialized services for senior communities

CRE Brokers Focus:
1) Build relationships with life insurance companies
2) Partner with legal firms that arrange complex capital stacks (mix of senior and mezzanine debt)
3) Provide services to developers navigating the complexities of affordable housing financing, including tax credits and public-private partnerships

💸Top Weekly Growth Capital Deals

• Barings provides $130M debt financing for Spruce Power - Read

• Guess?, Inc. announces EUR 100 million expansion of its existing European credit facility - Read

• Ravinia Capital advises CommonView Capital on successful $35 million debt transaction for its portfolio company, Pain Specialists of America - Read

• UMB Capital Finance provides a $33M credit facility for a metals manufacturer in Colorado - Read

• CytoSorbents enters $20M credit facility with Avenue Capital Group - Read

Top Weekly ABL Deals

• BrightView announces increase and extension of $325M receivables financing facility - Read

• Hawaii Public Utilities Commission approves Hawaiian Electric’s $250M utility accounts receivable credit facility - Read

• Post Road Equipment Finance provides $25M equipment lease line to plastics, rubber manufacturer - Read

• Hedaya Capital provides retail expertise and $2.5M growth financing - Read

Key Transactions

• CytoSorbents Corporation secured a $20 million credit facility with Avenue Capital Group. The facility features a three-year term and tranched availability tied to regulatory milestones. This deal demonstrates how life sciences companies can leverage potential market approvals to access capital.

• Spruce Power Holding Corporation's $130 million non-recourse debt facility, priced at a fixed rate of 6.889% and rated A+ by Kroll, showcases the attractiveness of renewable energy assets to institutional lenders.

• BrightView Holdings' expansion of its receivables facility to $325 million, with a maturity extension to June 2027 and improved pricing tiers, highlights the value of solid cash flow businesses in securing favorable terms.

Loan Structures
We're seeing a trend towards flexible financing structures with tenors typically ranging from three to five years. The CytoSorbents deal with Avenue Capital Group exemplifies this, offering a three-year term with milestone-based tranches. Loan-to-value ratios are generally conservative, as evidenced by Spruce Power's facility representing a 69% advance rate on discounted cash flows. Covenants are increasingly tailored to specific industry metrics and company performance, with a notable shift towards sustainability-linked terms, as seen in Guess?, Inc.'s European credit facility. The prevalence of accordion features and tranched availability, such as in BrightView's receivables facility expansion, indicates lenders' willingness to scale commitments as borrowers achieve growth targets.

Tips For Borrowers

1. Leverage regulatory milestones or market expansion plans to structure tranched facilities, potentially lowering overall costs.

2. To align financial and ESG goals, explore sustainability-linked pricing mechanisms, such as Guess?'s European credit facility.

3. Consider the benefits of asset-based lending structures, like Hawaiian Electric's $250 million ABL facility, for increased flexibility.

4. Evaluate the potential of receivables financing to unlock working capital, as demonstrated by the Hedaya Capital Group's $2.5 million facility for a personal care products company.

5. Prepare robust financial projections and operational plans to instill confidence in lenders and potentially secure more favorable terms.

6. Stay attuned to market conditions and be prepared to move quickly when refinancing opportunities arise, as evidenced by BrightView's proactive approach to reducing interest expenses.

💡 Top Markets/Opportunities:
Asset-Based/Growth Cap Lenders Focus 
1) Renewable energy companies
2) Healthcare services providers in high-growth markets
3) Landscaping and facilities management companies
4) Consumer product companies

Family Offices Focus
1) Companies that support the renewable energy sector
2) companies developing innovative medical devices
3) Explore opportunities in the personal care products industry

Private Equity Firms Focus
1) Companies in the pain management sector
2) Metal manufacturing industry
3) Companies that provide technology or services to improve receivables management

Brokers Focus
1) Connect life sciences companies with lenders who understand milestone-based financing
2) Help companies in traditional industries, like landscaping or facilities management, optimize their financing structures
3) Fast-growing consumer product companies that might be outgrowing their current lenders

Top International Deals

• Eldorado Gold announces extension and increase of its senior secured $350M credit facility - Read

• Amethyst Radiotherapy secures €300M in financing from Ares Management - Read

• Zelestra adds €225M in loan financing to funding streams, pushing total investment to €535M - Read

• Scandic launches $314M sustainability-linked long-term financing - Read

• Engie secures $175M ADB loan for 400MW solar project in India - Read

• Genex bags $109M financing for major solar assets in Australia - Read

• Enefit Green increases loan to €100M - Read

• ONWARD® Medical obtains debt financing with up to €52.5M secured loan from Runway Growth Capital LLC - Read

• Nyxoah has signed a €37.5M loan facility agreement with the European Investment Bank - Read

• Heads of Terms agreed for $35M revolving credit facility - Read
  

Loan Structures
Most transactions feature multi-year tenors, typically three to five years, with some extending as far as 2030. Loan-to-value ratios are not explicitly stated in most cases, but the sizeable facilities suggest relatively high LTVs, particularly for established companies or those with strong asset bases. While not universally detailed, covenant packages include standard affirmative and negative covenants, with some deals incorporating financial metrics tied to revenue, EBITDA, and liquidity. The prevalent structure across these transactions is the revolving credit facility, often complemented by term loan tranches. This hybrid approach allows borrowers to draw funds as needed while securing longer-term capital.

Key Transactions

• ONWARD Medical's €52.5 million loan showcases a strategic approach to growth financing. The multi-tranche structure, with draw periods extending to 2027, allows the company to access capital as it achieves key milestones, aligning funding with its development timeline. The Term SOFR plus 6.50% rate reflects the risk appetite for innovative medical technology while including warrants, which provides upside potential for the lender.

• Eldorado Gold's $350 million revolving credit facility demonstrates the mining industry's ability to secure flexible financing. The four-year term with an accordion feature provides liquidity and room for expansion. Based on the company's net-leverage ratio, the tiered interest rate structure incentivizes financial discipline and could lead to cost savings as the company's performance improves.

• Genex Power's AUS$162 million refinancing for solar projects illustrates the favorable terms for renewable energy assets. The five-year facility with interest rates hedged at advantageous levels until 2030 provides long-term certainty and cost control. The involvement of international banks like DZ BANK and Westpac signals strong institutional support for the renewable energy sector.

Tips For Borrowers

• Consider multi-tranche structures to align capital access with project milestones and reduce initial borrowing costs.

• Explore sustainability-linked metrics to secure more favorable terms, as seen in Zelestra's €535 million facility.

• Leverage strong asset performance to refinance existing debt on better terms, as demonstrated by Genex Power's solar project refinancing.

• Look beyond traditional banks to alternative lenders like Runway Growth Capital for innovative financing solutions.

• Prepare robust financial projections and clear operational milestones to instill confidence in lenders and potentially unlock additional tranches.

• Consider hedging strategies to lock in favorable interest rates over extended periods, particularly in volatile market conditions.

New Lender Program

• State Bank of India launches SME lending solution - Read

😲 Didn’t see that one coming

• Bob’s Stores confirms closures under Chapter 11 restructuring - Read

• Soffe, Salt Life clothing seller files for Chapter 11 bankruptcy - Read

• East West Bank sues Irwin Naturals, Klee Irwin for defaulting on $40M loan - Read

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