IPC Boosts Acquisition Facility to $200M

TORONTO-IPC US REIT has agreed to a restructuring of its existing $150 million acquisition facility that will push it to $200 million at reduced spreads. The new facility will be due 3 years from closing with two one-year extensions at the REIT’s option. The transaction is expected to close this month.The lending group is made up of KeyBank Real Estate Capital, Barclays Capital, Allied Irish Bank, Sovereign Bank, Fifth Third Bank, Canadian Imperial Bank of Commerce, Royal Bank of Canada and Euro-Hypo. Allied Irish Bank joined the lending group in December, when the credit facility was boosted from $100 million to $150 million. Sovereign Bank and Fifth Third Bank joined in for this latest boost.Spreads over LIBOR will now range between 175 basis points and 250 basis points, depending on the overall loan-to-value ratio. The spreads for the credit facility agreed to in December were 300 basis points to 350 basis points. Based on the outstanding balance at March 31, 2005 and the REIT’s then loan to value calculations, the interest savings on an annualized basis will be approximately $900,000. IPC chief investment officer Dov Meyer was unavailable Tuesday for further comment.”The reduction in rate and increase in capacity demonstrate a vote of confidence in the REIT and its management team,” says John Murphy of KeyBank Real Estate Capital. “IPC has proved itself as being a prudent borrower.”IPC US REIT is the only REIT in Canada that invests exclusively in US commercial real estate. The credit facility is for IPC (US) Inc., a subsidiary in which IPC US REIT owns an 88% economic interest. IPC US manages and has ownership interests ranging from 30% to 100% in 37 properties in the United States comprising over 10.4 million sf of rentable area. The REIT holds a $51 million preferred equity investment in the Bank of America Center, a 1.8 million-sf office complex located in the financial core of San Francisco. In March, IPC (US) Inc. acquired two US office assets. In Las Vegas, is paid $71 million for the city’s tallest Downtown building, the 17-story, 254,000-sf Bank of America Plaza. The property was 95% leased at the time of sale, with BofA leasing about 23% of the building until 2015. Due to the building’s proximity to the new Federal Courthouse, the Clark County Courthouse and the new Regional Justice Center, several law firms also occupy the building. In Philadelphia, it paid $97.6 million for an 89% interest in United Plaza, the 20-story, 621,348-sf class A office building at 22 S. 17th St. The seller, Indianapolis-based Oak Street Capital, retains an 11%-interest. Completed in 1976 and later upgraded, the building was 84% leased at the time of sale. Duane Morris, the locally based law firm, leases 226,000 sf in the building under a 15-year lease agreement.