NEWARK-Jones Lang LaSalle’s Capital Markets team has orchestrated a complex $48 million credit tenant lease financing deal for an industrial warehouse/bus maintenance complex in Newark owned by Hartz Mountain Industries.
A foreign CTL investor provided a fixed-rate, 24-year loan at 4.32 % interest for the the property at 601 Doremus, which is leased to New Jersey Transit Corporation through 2036. The property includes a 638,092-square-foot building set on 21.7 acres.
Managing director Joe Garibaldi and executive vice-presidents Bill Cavagnaro and Brion Haist led the JLL team on this transaction.
“This was an extremely complex financing assignment for a very unique property that involved a modified industrial condominium,” says Garibaldi. “The loan provides financing for a critical facility for New Jersey Transit, in which the entire city’s buses are maintained.”
Garibaldi says that because of the credit strength of both Hartz and NJT, “We were able to unlock substantial trapped value in this essential property.”
This kind of credit tenant lease financing derives proceeds from the direct sale of bonds to investors in the global capital markets – as opposed to borrowing from commercial real estate lenders, Garibaldi explained. CTL financing is most suitable for single-tenant properties occupied by “investment-grade tenants” with long-term triple-net leases, as was the case here, he says.
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