HFF Brokers $129M Refi for Hampshire Portfolio

Holliday Fenoglio Fowler L.P. has arranged a $129.4 million refinancing for a 14-property, 1.35 million-square-foot portfolio that’s part of The Hampshire Cos.’ Hampshire Partners Fund VI. The properties, 12 in New Jersey and two in southern Connecticut, consist of six office buildings (877,000 square feet), five flex buildings (167,000 square feet) and three industrial buildings (306,000 square feet).  In a prepared statement, HFF noted that “The Hampshire Cos. is recapitalizing a portion of the fund’s assets, replacing a current line of credit and rebalancing the rest of the portfolio with the new loan.” Based in Morristown, N.J., The Hampshire Cos. is a private real estate investment fund manager with assets valued at more than $1.5 billion.  The lending syndicate is led by Webster Bank of Waterbury, Conn. and includes Sovereign Bank of Reading, Pa. Bill Wrang, Webster senior vice president and head of commercial real estate, told CPN today that although part of what drove this transaction is that Hampshire was an existing customer of both Webster and Sovereign, the deal has sound fundamentals. “It’s a cash flowing loan,” Wrang said, with debt coverage over 1.3.  And even though the average occupancy in the portfolio is barely 68 percent, Wrang noted that some of the properties are newly rehabbed by Hampshire and have tenants signed and scheduled to move in. Notable current tenants include Royal Bank of Scotland, GSA, Cablevision, Alcatel-Lucent and TD BankNorth.  Wrang told CPN that the two banks, which split the package 50-50, have so far funded $90 million of the three-year, adjustable-rate loan and are looking to syndicate the deal down.  Webster had originally bid on the refi last summer, he said, but lost to a German lender that offered more aggressive terms. The Germans backed out, however, and Webster requoted the deal in late November and early December on terms very similar to those it had offered over the summer.   Even given that post-subprime bobble, Wrang described the transaction as “a pretty typical bank bridge loan.”