Square Mile Plays $68M Role in Recap of 5 MSF California Office Portfolio
By Barbra Murray, Contributing Editor
Just a week after The Blackstone Group L.P. and a venture led by SL Green Realty Corp. announced the recapitalization of a 4.5-million-square-foot Southern California office portfolio, news emerges of Square Mile Capital Management L.L.C.’s role in the deal. Square Mile originated a $68 million mezzanine loan that, along with Blackstone’s previously announced $85 million investment in the group of assets, brings the total financing on the 31-property portfolio to $746.8 million.
The collection of 59 office buildings spans the greater Los Angeles, Orange County and San Diego areas and includes such prominent towers as the 407,700-square-foot Skyview Center near Los Angeles International Airport and the Class A, 110,000-square-foot Carmel Valley Centre in the San Diageo submarket of Del Mar Heights.
The $68 million mezzanine loan originated by Square Mile came less than two months after the SL Green-led venture took over ownership of the assets in lieu of foreclosure in July. Proceeds from the mezzanine loan were utilized in the recapitalization endeavor, which involved the extension and modification of $678.8 million senior financing on the portfolio, led by New York Life Insurance Co. The massive financing package also included a group of lenders consisting of DekaBank Deutsche Girozentrale, Westdeutsche ImmobilienBank AG, Muenchener Hypothekenbank GG and Wells Fargo Bank.
“This portfolio is primed for a rebound,” David Schonbraun, SL Green co-chief investment officer, said in a prepared statement. “The fact that more than a half dozen expert equity and debt investors agree, and have come together to make substantial financial commitments, speaks volumes about their confidence as well.”