SACRAMENTO-The California State Teachers’ Retirement System has recapitalized a 4.1-million-sf portfolio of 38 warehouses in Reno, NV with a $118-million loan package from Prudential Mortgage Capital Co. The loan package represents about 70% of the value of the Dermody Industrial Group portfolio.When CalSTRS bought into the portfolio last year, it assumed existing financing and joined existing investors CalPERS and Reno-based DP Partners, one of the nation’s largest private industrial developers. The refinance was reportedly used largely to buy out CalPERS’ interest and pay off the vast majority of existing debt on the property.Marcia Diaz of Prudential’s Los Angeles office originated the loan. Secured Capital managing director Mark Williams sourced the loan for CalSTRS. Williams acknowledged the transaction but declined to confirm the purpose of the refinance or provide further detail. Bruce Storey, DP’s executive vice president and chief financial officer, tells that CalSTRS simply wanted to “take advantage of the current debt markets.”According to Prudential, the loan package is cross collateralized by the portfolio and comprises three tranches: an $82-million fixed-rate loan; a $21-million fixed-rate loan; and, a $15.3-million floating-rate loan. The fixed-rate tranches have 10-year terms, while the floating-rate loan has a five-year term. The fixed-rate loans amortize over 30 years. Generally, the idea behind a fixed and floating-rate combination loan like this is flexibility, as the floating-rate portion most likely has minimal to no prepayment penalty as opposed to fixed-rate loans.

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