5 financial institution lenders are behind the $316 million development mortgage for RXR Realty and LBA Logistics’ 1.1 million-square-foot logistics warehouse and distribution facility in Queens that’s reportedly pre-leased to Amazon, sources near the deal instructed Business Observer.
Information of the deal broke late final week, though JPMorgan Chase was reported as the only real lender.
Sources instructed CO that each JPMorgan Chase and Financial institution of America co-led the origination of the senior mortgage bundle, splitting roughly $90 million every, whereas Raymond James Financial institution, Emigrant Financial institution and CIT Group assumed roughly $60 million, $50 million and $30 million, respectively, sources mentioned.
The financing will fund development on RXR and Irvine, Calif.-based LBA’s Grand Logistics Middle, an enormous, multi-story distribution facility that can be positioned at 55-15 Grand Avenue in Maspeth, Queens. The five-story property contains a Class A distribution facility with fleet storage capabilities for Amazon, and will probably be a primary distribution hub with direct or approximate entry to Lengthy Island and 4 of New York’s 5 boroughs.
Will probably be Amazon’s largest lease within the metropolis for the reason that e-commerce large’s scrapped HQ2 plans for Lengthy Island Metropolis, Queens in 2019. The mission is predicted to be delivered in 2022, as per data from CoStar Group.
The transaction is a snapshot of the forms of offers institutional financial institution lenders are keen to sort out in at present’s local weather — loans offered to institutional sponsors on sturdy, well-leased (or pre-leased) properties with credit score tenants.
“With a lot of the main banks hitting pause through the pandemic, the development mortgage market turned difficult, however we have been extremely assured within the deserves of the mission regardless of the setting,” Michael Maturo, president of RXR Realty, mentioned in an announcement. “We have been lucky to establish a lead financial institution and have a number of contributors to fill out the syndication on a big mortgage with optimum phrases on this market.”
Maturo added that the quantity of consideration that the mission acquired “is a sign of the power of the location and the RXR [and] LBA sponsorship, in addition to the standard of the tenant. It’s a testomony that the best-of-the-best tasks are nonetheless reaching engaging capitalization buildings.”
JLL Capital Markets’ Kevin MacKenzie, Mike Tepedino and Brian Torp negotiated the debt, whereas JLL’s Robert Kossar and Leslie Lanne — from the agency’s company leasing division — secured the Amazon lease.
Whereas JLL wouldn’t identify Amazon because the tenant in its announcement, and sources who spoke to CO declined to call a tenant resulting from confidentiality restrictions, Amazon was mentioned to be negotiating for the space as not too long ago as December of final yr, as per a report from Crain’s New York Enterprise. A number of months later, in June of this yr, Enterprise Insider reported that Amazon had certainly signed on to take the space.
RXR and LBA first filed plans for the mission in late 2018, which might see them begin demolition on present buildings on the location final yr. They purchased the three parcels that make up the location for $72 million at first of 2018.
Grand Logistics Middle can be positioned on the crossroads of the Brooklyn Queens Expressway and Lengthy Island Expressway, two main thruways that act as conduits between the town’s respective boroughs. As such, the constructing’s location offers entry to Manhattan and the outer borough markets, making the tenant’s last-mile supply technique to service the 7.9 million residents throughout the New York Metropolis metropolitan space attainable.
“After exploring a number of capitalization buildings with different financing sources, we have been happy with the end result of acquiring a conventional development mortgage of this measurement in an environment friendly course of,” mentioned Tom Rutherford, LBA’s principal of finance.
The economic sector continues to be buoyed by COVID-19’s acceleration of the e-commerce development, and — in keeping with JLL analysis — Maspeth has solely a 1.8 p.c industrial property emptiness fee.
This story has been up to date since publication to incorporate extra details about the quantity of debt every lender assumed within the deal.