CalSTRS Lands $992M Loan for 7 MSF Portfolio

The pension fund relied on JLL Capital Markets to arrange financing for the 17-property collection of office, industrial and multifamily assets.
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California State Teachers’ Retirement System has secured financing for a 7 million-square-foot, multi-state commercial real estate portfolio. With the assistance of JLL Capital Markets, the public pension fund giant and its advisor, PCCP, obtained an approximately $991.8 million loan from New York Life Insurance Co.

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Neither JLL nor CalSTRS have identified the specific assets in the portfolio, which consists of five office properties, nine industrial facilities and three multifamily communities. The collection spans both coasts, with locations in top markets in California, Arizona, Texas, Tennessee, Georgia, Virginia and Massachusetts. And the portfolio’s tenant roster is replete with a range of creditworthy occupants.

The financing for the group of assets came in the form of a 10-year, fixed rate loan. JLL’s Kevin MacKenzie, Bruce Ganong and Brian Torp represented CalSTRS and PCCP in the transaction, and Spencer Bergthold, Sam Godfrey, Bercut Smith and Andie Fezell assisted the team.

Another big year for debt

2019 was a landmark year for the commercial real estate debt markets, with financing activity hitting a record high of $703 billion, according to a fourth quarter 2019 report by Newmark Knight Frank. More of the same appears to be on tap for 2020. “With low benchmark interest rates and increased competition among lenders, debt remains historically inexpensive at a point in time where liquidity and transaction volume are at a near cycle high,” according to the NKF report.

The first quarter of 2020 has yielded a bevy of big-ticket financing deals, and JLL arranged more than a few of those transactions. The firm commenced the New Year with news of its placement of an $870 million construction loan with The Children’s Investment Fund for the initial phase of the 1.9 million-square-foot South Station redevelopment project in Boston. And earlier in March, JLL had a busy two days, with back-to-back announcements. The Capital Markets group orchestrated a $545 million loan through Goldman Sachs for the financing of the 340,000-square-foot, mixed-use office tower at 711 Fifth Ave. in Manhattan, and arranged $256 million in debt with a domestic financing institution for the refinancing of the 1.3 million-square-foot Chicago Board of Trade Building complex in the Windy City.