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BOSTON- Fortis Property Group will receive $775 million in financing to help fund the $889 million acquisition of the State Street Financial Center. Carlton Advisory Services of New York arranged the financing for the one-million-sf, fully occupied trophy asset that the New York-based Fortis closed on earlier this week.
The financing for the One Lincoln St. property was arranged through two investment institutions, Wachovia and Dillon Read, both of which two had bid separately on the financing.
"Both of these banks are very competitive and a lot of times they will split the loan to reduce the risk, which is what they did," Carlton chairman Howard Michaels tells GlobeSt.com.
The remaining $114 million in funding for the acquisition will come from Fortis and the company's investors, Michaels says.
Michaels says the AA- credit rating of the building's sole tenant, State Street Corp., along with the State Street's long-term lease that extends to 2023, had a significant effect on the loan's terms, but Michaels declined to disclose what those terms were.
However, a source familiar with the agreement, tells GlobeSt.com that Fortis received a 10-year fixed rate that allows for interest only payments over the life of the loan.
Michaels was assisted in the transaction by Michael Campbell and Chad Buchanan, both with Carlton Advisory Services.
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