"This was a fast-moving and highly structuring financing requiring a two-stage closing, floating rate and rate-resetable fixed-rate notes, and involving properties in the U.S. and Mexico," according to Frederick Van Overbeek, a principal for Prudential Mortgage Capital. "We are able to provide the venture with the flexibility and rapid closing they required."
According to Van Overbeek, "the funding consists of three five-year acquisition loans secured by 29 industrial properties in 13 states, adding up to more than 6.3 million sf of space." He notes that most of the assets are distribution centers that have been constructed during the last several years. Tenants occupying the facilities include names like Unilever, Barnes & Noble, Subaru of America and Nippon Express.
The two-phased funding started with a $120 million rate-resetable, fixed-rate instrument secured by 17 of the properties. Besides the initial security, Prudential took an equity pledge of Prologis and Macquarie's Mexican properties, a total of five distribution facilities located in Monterrey and Reynosa, Mexico.
The second funding was made up of a $22.6 million fixed-rate and a $30.4 million variable rate mortgage secured by the remaining 12 properties. In the second funding, Prudential cross-collateralized the loans, released the equity pledge on the assets in Mexico and reset the interest rate on the $120 million loan to a lower coupon.
The ProLogis Macquarie venture was formed early this year when ProLogis, the Aurora, CO-based distribution center operator, teamed up with Australia's Macquarie Bank, an international investment bank and developer and manager of sector-specific property funds in Australia. The two organizations formed a North American property fund that included facilities located in 14 markets in the U.S. and Mexico.
For its part, Prudential Mortgage Capital Co. had a total of $35.2 billion of assets under management and administration through the first quarter of this year.
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