The locally based financial specialty REIT reported that it is completing negotiations with affiliates of Deutsche Bank and Bear Stearns & Co. on a financing package of up to $350 million for the BofA portfolio. It is expected to close on or about Feb. 1. With a rate lock agreement, it will have locked in a favorable fixed rate on most of the debt for the acquisition.
At completion of the loan agreement, the proportion of American Financial's fixed-rate indebtedness will rise to 96% of its total debt, according to a statement issued by the REIT. It expects to use the proceeds of the secured loan primarily to pay down the outstanding balance on its secured line of credit. In addition, the statement says American Financial intends to redraw from the secured line of credit and from its unsecured credit facility for future acquisitions.
Over the past few months, the company has sold off significant proportions of non-core properties in the BofA portfolio. In late December, for example, it sold a four-building, 667,500-sf package that was just 25% leased to Philadelphia-based Berwind Property Group for $45 million.
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