NY-based NorthStar Loans $91M Against CA Assets

Legacy Wateridge

A subsidiary of New York-based NorthStar Real Estate Income Trust, Inc. has originated senior loan for $91 million secured by a 23-building, 727,679 square foot industrial business park in Santa Fe Springs, CA, and a two-building office complex totaling 123,675 square feet in Sorrento Mesa, CA.

The Corporate Center in Santa Fe Springs is subject to a below-market ground lease with 55 years remaining on the lease. The project, located at the intersection of the I-605 and the I-5 freeways, equidistant between the economic centers of Los Angeles and Orange County, has office, R&D, multi-tenant incubator units and dock-high warehouse/distribution space, according to legacypartners.com.

The Technology Center is 89 percent leased and occupied by 85 tenants, which includes Los Angeles County and Wells Fargo Bank. Legacy Wateridge consists of two two-story Class A office buildings totaling 123,675 square in Sorrento Mesa near I-805, I-5 and the recently-completed State Route 56.

The loan partially refinanced the properties and funded reserves for tenant improvements and leasing commissions.

The Senior Loan bears interest at a floating rate of 6.95% over the one-month LIBOR Rate but at no point will it be less than 0.25 percent, resulting in a minimum interest rate of 7.2 percent.

The loan-to-value ratio is approximately 85 percent. The initial term of the senior loan is 36 months, with two one-year extension options.

The borrower purchased the properties in 2006 for $118 million and has invested over $10 million in capital improvements since acquisition. The Borrower also invested an additional $2.7 million on the Closing Date and is required to maintain a minimum net worth of $25 million (excluding the Property) and unrestricted liquidity of $3 million.

The borrower has acquired and developed 379 real estate assets at a cost of $8.7 billion and currently manages a 12.3 million square foot commercial real estate portfolio valued in excess of $2.7 billion.