$1.3B Loan Backed by WPT Portfolio Moves to Special Servicing
The CMBS loan on 146 properties owned by Workspace comes due in July.
A $1.3B CMBS loan backed by 146 properties owned by Workspace Property Trust (WPT)—more than half of the Boca Raton-based company’s portfolio—has headed to special servicing.
The loan, originated in 2018 by JPMorgan Chase is scheduled to come due in July, according to a report from Morningstar Credit Information & Analytics.
Most of the properties backed by the loan, which in total encompass about 10M SF in four states, are office and light industrial buildings; more than 60 are located in Pennsylvania.
The portfolio backed by the loan was 81% occupied in 2022 and had a net cash flow about 10% below what was underwritten in the financial package, Morningstar reported. The appraised value of the buildings was $1.6B in 2018.
WPT acquired the properties now in special servicing from Liberty Property Trust in two transactions in 2018, including a $969M deal for 30 buildings in Pennsylvania, shortly before Liberty was acquired by Prologis in 2019 for $12B.
Most of the Pennsylvania properties are located in and around the Malvern and Horsham submarkets, suburbs of Philadelphia, including several buildings in the Great Valley Corporate Center business park.
The largest Philadelphia-area property impacted by the JPMorgan Chase loan is a 233K SF building at 1500 Liberty Ridge Drive in Chesterbrook, PA.
WPT’s overall CRE holdings encompass 19M SF; the part not covered by the loan in special servicing was acquired from Griffin Realty Trust (GRT) in August. Singapore-based sovereign wealth fund GIC was an equity partner in the deal with Griffin.
The $1.1B deal with GRT involved 41 properties encompassing about 8M SF in high-growth markets across the US. The Griffin portfolio included 53 Class A suburban office buildings.
According to a release issued by WPT in August, the acquisition of the GRT portfolio nearly doubled the size of WPT’s holdings, which grew to more than 200 buildings in 22 major US markets.
The acquisition “establishes Workspace as the preferred commercial real estate partner for the Fortune 1000,” the release said, adding that about 7M SF of the WPT portfolio is leased by companies in the Fortune 1000.
“With this transaction, Workspace becomes the preeminent national suburban office and light industrial company in the country and the preferred commercial real estate partner for the Fortune 1000,” Workspace Founder Thomas Rizk said, in the release. “We look forward to building on GRT’s legacy by bringing the unique skills, tenant-oriented service, and operating protocols of Workspace to these newly acquired markets.”
GRT maintained a minority ownership in the August transaction, with JPMorgan Chase and Bank of Montreal providing senior debt financing for the deal.