Blackstone has pooled together seven UK regional distribution warehouses worth around £95m within its LogiCor pan-European logistics subsidiary and financed the portfolio with a five-year £63.3m senior and mezzanine financing package from Wells Fargo and LaSalle Investment Management.
Wells Fargo has provided a five-year £54.3m senior loan, priced at around 300 basis points over three-month LIBOR, while LaSalle Investment Management’s debt investments team wrote a co-terminus £13m mezzanine facility, which was thought to be priced around 11%, CoStar News understands.
Based on the £95m combined portfolio value, the senior LTV is around 57%, while the combined senior and mezzanine LTV is 66.6%.
Blackstone is building a critical mass for its pan-European LogiCor industrial portfolio – which currently comprises a 91-strong portfolio throughout the UK, France and Poland totalling over 26m sq ft – ahead of a likely initial public offering in the future.
The seven-strong portfolio comprises: three Midlands assets, three in the North West and one in Yorkshire, each of which is described as prominent asset within mature UK markets. Six of the seven properties have been leased to well-known tenants, while the seventh is currently vacant and being refurbished by Blackstone.
Chip Fedalen, head of Wells Fargo Commercial Real Estate’s Institutional and Metro Markets Group, said: “We felt this project was well-suited for them as the company continues expanding its industrial footprint in the UK. We look forward to seeing the successes of these properties and continuing the growth of our commercial real estate business in the UK.”
While Wells declined to comment, CoStar News understands that Wells Fargo has teamed up with Lone Star to compete against Starwood Capital and PIMCO to buy the former Eurohypo’s circa €5bn UK commercial real estate loan book.
Wells Fargo and PIMCO are competing for the performing pools, while Lone Star and Starwood are competing for the sub and non-performing pools.
Amy Aznar, head of debt investments at LaSalle Investment Management, said: “This represents our team’s 12 mezzanine loan provided in the last 12 months and third with Blackstone in the UK logistics space. We are delighted to work with Blackstone and Wells Fargo again and look forward to growing our relationship with both in the coming year.”
Early last year, Blackstone acquired two UK industrial portfolios, comprising 30 assets and together paying around £479m, financed in two pools with a combined £364m in senior debt and mezzanine.
ProLogis sold the 13-strong Teal portfolio to Blackstone for £214m in February 2012, which the private equity firm financed with a £160m five-year debt facility with Deutsche Pfandbriefbank and BAWAG providing the senior debt and LaSalle providing the mezzanine loan.
Prior to this, Blackstone edged out Morgan Stanley Real Estate Investing to acquire the £265m 17-strong Triangle portfolio, predominantly owned by London & Stamford.
Wells Fargo, HSBC and Deutsche Pfandbriefbank provided a split of the senior debt, with LaSalle once again writing the senior debt in a combined £204m financing package. The Triangle portfolio comprises 14 assets in the Midlands and one each in Scotland, the South East and the South West.