NorthStar Income originates USD43.3m senior loan
NorthStar Real Estate Income Trust has originated a USD43.3m senior loan secured by three contiguous office properties located in the central business district of Richmond, Virginia, known as the SunTrust Center.
The proceeds of the loan will be used to partially refinance the property and to fund reserves for tenant improvements and leasing commissions.
A majority of the property is leased to SunTrust Banks through December 2017, with eight consecutive renewal options for five years each. SunTrust, an investment-grade rated company, has been a tenant since 1998 and provides stability to the property's cash flow.
In addition, the owner of the property has an established track record of successfully owning and managing high-quality office properties throughout the Southeastern US. Since acquiring the property in 2007 for USD75.6m, the owner has invested over USD4.3m of additional capital to maintain and improve the property.
Daniel R. Gilbert, president and chief investment officer of NorthStar Income, says: "This senior loan further demonstrates our ability to secure high-quality transactions through established relationships created by our sponsor. Having a sponsor with USD7bn of assets under management allows NorthStar Income access to many well-regarded borrowers and commercial real estate operators. As we grow our equity capital base, and cultivate our relationships, we believe our ability to capitalise on these desirable opportunities is expected to increase, generating accretive yields for our stockholders."
Since going effective in July 2011, NorthStar Income has successfully originated over USD367.5m in commercial real estate loans. NorthStar Income's total portfolio, as of 23 August 2012, consists of 17 loans and one commercial real estate security with an overall weight average leveraged yield of approximately 13.7 per cent.
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