REAL ESTATE NEWS

Starwood's real estate investment trust has scored a $930 million commercial mortgage-backed securities loan for 54 industrial buildings, according to a report from Fitch Ratings.

The credit agency said that it expects that Barclays, Goldman Sachs, Morgan Stanley, Natixis Real Estate Capital LLC and UBS will co-originate the debt. The loan covers a two-year term, with three one-year extension options, at a floating interest rate.

Additionally, Fitch said that J.P. Morgan plans to issue another $95 million through an IO mezzanine loan that features a floating rate.

Almost all of the funds are expected to go toward paying down the existing debt, amounting to $1.003 billion. Moreover, roughly $20 million is set to be used for closing costs; $1.6 million for tenant improvements, free rent and leasing commissions; and Starwood REIT taking $5.2 million in equity.

The industrial portfolio is located in five states, including Nevada, Arizona and Colorado. The properties break down to 30 light, 11 advanced manufacturing and 13 warehouse/distribution facilities. The total square footage comes out to 8.2 million square feet. Most of the assets are located in Nevada (19), followed by Colorado (14) and Arizona (11). It's unclear where the other properties in the portfolio are located.

Fitch forecasts that the portfolio will generate a net cash flow of $71.3 million. The credit agency anticipates that the refinancing will close on September 26.

The deal by Starwood comes as industrial faces headwinds due to uncertainty from tariffs. A recent forecast from NAIOP predicts that net absorption will stay “nearly flat” through the second half of the year, as supply has been outpacing demand. A recession could cause negative absorption through early 2026, Colliers warned.

Source: GlobeSt/ALM