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CMA
November 09, 2018  

Citi Team Syndicating Gramercy Buyout Loan

A trio of banks led by Citigroup is looking to syndicate a $1.2 billion loan to Blackstone, part of the financing for the fund shop’s takeover of Gramercy Property.

The five-year, floating-rate debt is backed by 96 of the 355 industrial and other properties that made up the holdings of Gramercy, a New York REIT. Citi was joined by Bank of America and Barclays in originating the mortgage, and the three are now talking to other lenders about taking down pieces. Eastdil Secured advised Blackstone on the financing.

The New York investment giant closed on the $7.6 billion acquisition on Oct. 10. Now, it’s seeking to sell off large chunks of the portfolio — hiring brokers to market some $2.2 billion worth of industrial properties and $500 million of offices.

As previously reported, Citi and BofA also provided $3 billion of commercial MBS debt in conjunction with the takeover. That floating-rate package, backed by 171 properties, has a two-year term and three single-year extension options. The $2.5 billion senior portion, with a coupon of 142 bp over one-month Libor, was securitized in a stand-alone offering last month (BX 2018-IND) that was the third-largest CMBS deal to price since the market crash. The mezzanine debt was divided into a $300 million senior portion priced at Libor plus 400 bp, and a $200 million junior piece pegged to Libor plus 550 bp.

Gramercy owned an 81.1 million-sf portfolio as of June 30, the vast majority of which was industrial properties, with concentrations in the Chicago area, the Carolinas and Georgia.