Blackstone has financed the purchase of Cannon Bridge House with a five-year £120m senior loan from BNP Paribas Corporate and Institutional Banking.
Blackstone acquired the City of London office through a loan-to-own strategy in first securing the B-Loan from Fortress Investment Group underneath the securitised loan in the Hercules (Eclipse 2006-4) CMBS.
Fortress sold the nominally-valued £27m B-Loan to Blackstone for above £11m three months ago which allowed the firm to repay the outstanding £155.1m Cannon Bridge House Loan and retire the junior debt.
Cannon Bridge House is multi-let to tenants including Natixis Capital Partners, IG Index, Winterflood Capital, and Tyler Capital.
Prior to the sale, leases on three of the building’s tenants were re-geared, covering 85,412 sq ft – or 32.6% – of the 262,000 sq ft of office space, increasing the weighted average unexpired lease term to around seven years. The value of the office block is expected to rise next year after Blackstone completes re-gears further leases.
Westbrook, the former owner, bought Cannon Bridge House in 2006 for £206m in a joint venture with Atlas Capital and Lehman Brothers’ private equity division, financed by a £180m whole loan extended by Barclays Capital. Barclays split the loan into a £156m senior loan, which was spun into the Hercules (Eclipse 2006-4) CMBS transaction, and a £24m junior loan.
Blackstone and BNP Paribas declined to comment.