Green REIT and PIMCO have financed their acquisition of the Central Park office portfolio with a senior loan from Bank of Ireland, in the strongest indicator yet of the rapid normalizing domestic senior lending market.
CoStar News can reveal that the €150m five-year senior loan was priced at 295 basis points over three-month Euribor, reflecting a low cost of debt for Green REIT and PIMCO.
BoI’s senior loan reflects a 65.3% LTV on the €229.5m price paid to NAMA for the office component of Central Park by the joint venture partners, in a new entity called The Central Park Limited Partnership. The remaining residential component of Central Park was purchased by Kennedy Wilson for €82m in an undisclosed mix of equity and debt capital.
The sub 300 basis points senior loan margin for prime Irish commercial property is the tightest post credit margin achieved by investors since the domestic banking began new lending in the last three years, underscoring the banks’ fast-improving confidence reducing cost of capital.
Green REIT and PIMCO’s Central Park commercial property portfolio comprises six prime buildings covering approximately 691,000 sq ft in Leopardstown, South Dublin, generating €14.45m per annum of passing rent, rising to €15.46m per annum once rent-free periods expire. The commercial property portfolio has 87% occupancy.
Back in February, Blackstone financed its €100m acquisition of three of the four commercial properties in NAMA’s Platinum portfolio with a €60m senior loan from Morgan Stanley, likely at comparable pricing level.
This is Morgan Stanley’s second Irish commercial property financing for a PIMCO joint venture acquisition, and third in total, following financing the private equity fund’s €152.5m acquisition of the 25-strong mixed-use Ulysses portfolio from NAMA.
Morgan Stanley provided a €100m five-year acquisition finance facility, thought to be at sub 400 bps over three-month Euribor with the agreed margin thought to reflect the rapidly expiring leases and consequently cash flows from the portfolio. For a separate story on this financing, please click here.
CoStar News has broken the developments on Central Park at very step of the way.
From when it was officially brought to market last September; to details of the first round bids; to first reporting that Green REIT, PIMCO and Kennedy Wilson’s had won Central Park; to the triggered financing mandate; and finally today’s news of Bank of Ireland’s market-significant senior loan.
All parties declined to comment.