RALEIGH—New York-based real estate investment banking firm Joseph Merrill Capital just closed on a $48.2 million balance sheet loan execution for the refinancing of a 926,802-square-foot industrial and flex office portfolio in Raleigh, N.C. Affiliates of Equus Capital Partners, L.P., a leading private equity real estate fund manager, own and operate the portfolio.
“The lending environment continues to become increasingly competitive for high quality assets that are institutionally owned and maintained,” James Rizzi, managing principal at Joseph Merrill, tells GlobeSt.com. The interest rate on the Equus loan execution carries a rate sub 2.35%, is non-recourse, and provides prepayment flexibility.
Rizzi says he is seeing some national banks that are traditional recourse lenders transition to offer non-recourse lending programs to institutional and sophisticated sponsors such as Equus. The goal is to better diversify their client base and to capture new business in a market where non-recourse financing is highly sought after.
“This increases the pressure within the lending environment, given more players to the market, to tighten spreads in order to remain competitive in this historically low interest rate environment,” Rizzi says. “It is a great time to be refinancing.”
In the Raleigh-Durham area, Equus controls a larger portfolio comprised of nearly 4 million square feet of industrial, flex, and office space in six business parks, eight individual buildings, and land slated for more than 500,000 square feet of future development. All of the parks and individual properties within the portfolio are easily accessible close to Interstate 440 and/or the recently completed section of Interstate 540.
Equus' portfolio has performed at levels exceeding those of the Raleigh-Durham industrial market. The majority of the individual parks have maintained over 80% of its existing tenant base through renewals, with the bulk of the remainder relocating to other properties within the portfolio through expansion. The current weighted occupancy of the properties exceeds 90%.
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