Closing Loans Totaling $317M, Liberty Proves Financing Still Available

With the credit crisis in full swing, even secured loans are hard to come by, but Liberty Property Trust has managed to snag six of them totaling $317 million. Relying on industrial and office properties as collateral, the Malvern, Pa.-based REIT obtained the mortgage loans through several leading life insurance concerns.Liberty depended on industrial portfolios to back five of the mortgages, and utilized office properties to secure an additional loan. The company, which did not make specifics regarding the properties readily available, has a portfolio totaling 77 million square feet of office and industrial space in the U.S. and the U.K. Half of the total loan group carries three-year floating rates with two one-year renewal options, and the remaining half of the financing involves seven-year fixed rate loans. As is the case for many real estate companies these days, secured financing is the most–if not only–viable route for obtaining loans. “The market for senior unsecured debt financing has been generally unavailable to REITs during 2008,” Liberty noted in its annual report. “We anticipate that the senior unsecured debt market will be unavailable for the remainder of 2009. As a consequence, we have shifted our financing strategy to include more secured debt.” With the closing of the six loans, Liberty has wrapped up its planned secured financings for 2009. The company started the year with $270 million of senior unsecured debt and $41.8 million of secured debt maturing. Liberty was unavailable for comment by deadline. Other REITs that have recently been successful in acquiring funds via the secured loan road to pay down debt or refinance existing loans include leading distribution facility provider ProLogis, which, on behalf of the ProLogis California Fund, closed on a $120 million 10-year loan secured by industrial properties in California’s L.A. Basin and Inland Empire. And earlier this month, Colonial Properties Trust closed a $350 million credit facility secured by 19 multifamily communities.