CIP Real Estate Lands $59M Refi for Inland Empire Portfolio
- Nov 26, 2019
Acting on behalf of CIP Real Estate, JLL has arranged a $58.6 million loan for the recapitalization of three business parks accounting for 610,000 square feet of industrial/office space in Southern California’s Inland Empire.
READ ALSO: Inland Empire Office Report – Summer 2019
The three-property, 34-building portfolio encompasses College Business Park, Milliken Business Center and Summit Business Center. College Business Park, which straddles the cities of Upland and Claremont, consists of 313,500 square feet of office and industrial space. CIP acquired the 17-building campus in a joint venture with Alex. Brown Realty for $34.5 million in October 2015. Just two months later in December 2015, CIP and Alex. Brown partnered again to reacquire Milliken Business Center, a 158,000-square-foot, 12-structure industrial park in Ontario, in a $17.1 million transaction. The third park is Summit Business Center, which features 138,700 square feet of office and flex space across five buildings in Riverside. CIP purchased the then-troubled property in a joint venture with Blue Vista Capital Management in 2011 for $6.5 million, before recapitalizing the asset in a $12 million joint venture deal with a private investor in 2017. Together, the three business parks are 95 percent leased to a roster of more than 300 tenants.
JLL secured first lean financing for the business-park portfolio through a national life insurance company that provided CIP with a seven-year, fixed-rate loan. As part of the recapitalization, CIP turned to JLL Securities to help facilitate a more extensive strategic goal through the procurement of as much as $300 million of equity growth capital, which translates to $900 million in buying power over the next three to four years. Kevin MacKenzie, Brian Torp and Peter Thompson of JLL’s Capital Markets team represented CIP in the loan transaction, while Jeff Hawkins and Derek Landry of JLL Securities spearheaded the capital raise.
Restructuring debt and equity
The commercial real estate market has recorded an active year of recapitalizations in 2019, many of which were big-ticket transactions. Brookfield Financial Partners recapitalized a 4 million-square-foot national office portfolio with a $455 million financing package that included a $408.5 million mortgage loan. Innovo Property Group recapitalized the mixed-use property at 24-02 49th Ave. in Long Island City, Queens, to the tune of $438 million through new debt and an equity joint venture. And in one of the more eye-catching deals, JLL advised Welltower Inc. on the $1.8 billion recapitalization of the 4,137-unit Benchmark Senior Living portfolio, with private institutional capital.