LOS ANGELES—Westwood Financial Corp. announced a $1.2-billion corporate restructuring of 77 assets last month in what is shaping up to be on of the most complicated transactions of the year. The capital markets team at HFF, led by Kevin MacKenzie, secured $210 million in first lien financing on a total of ten retail properties located in Arizona, California, Kansas, North Carolina and Texas markets.

“We took on a very complicated transaction to do all of the things that we needed to do to combine, really, hundreds of entities and a portfolio of this many properties and transfer this many loans,” Randy Banchik, co-CEO of Westwood Financial Corp., tells GlobeSt.com. “The complexity was greater than many of our top advisors had been through before. It also speaks to the necessary evolution of private companies to be able to compete in this arena. We have opened up so many avenues for ourselves because we were willing to make this commitment.” Coordinating multiple assets, a newly formed sponsorship entity and an extended closing timeline contributed to the complexities of the deal.

The loans have 10-year terms with fixed interest rates. Of the individual transactions, $110 million was secured through a life company, while $100 million credit facility was funded by Wells Fargo. The firm went with a life company because it “provided a low-cost, long-term, fixed-rate option using a forward rate lock,” according to MacKenzie, as well as Wells Fargo, which “provided the flexibility needed to bridge assets into a strategic credit facility including a go forward solution on additional assets.” HFF will service the $110 million loan, which will be used to pay off existing loans and to assist in the firm's reconfiguration. The Wells Fargo deal also created a new lending relationship for Westwood, which the firm's co-CEO Joe Dykstra tells GlobeSt.com was one of the company's goals as part of the reconfiguration and will aid in growth.

Part of working through the complicated transaction also meant that Westwood had to get its pool of 500 investors on board with the change. “All of our constituents saw what we needed to do and were able to support us in it,” adds Banchik. “We now have even more resources to back up our competitive edge, and that is going to be very apparent to all the people that we have done business with.”

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Inside Westwood's Complicated Corporate Restructuring

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