Goldman Sachs is to undertake one of the largest single-lender UK financings this cycle, having been selected for a £680m underwrite of Blackstone’s logistics arm.
The US investment bank is to refinance Logicor’s UK portfolio with a five-year loan at a loan-to-value of just over 70% on its circa £970m, 14.6m sq ft portfolio.
A margin of just over 200 bps has been agreed, illustrating the renewed desire of investment banks to win large deals and take on risk. Squeezed margins have prompted some investment banks to concentrate on making money in the real estate sector predominantly through arrangement fees.
A rival banker said: “We liked the deal but it is becoming so competitive, and with everyone wanting to bank Blackstone, the covenant restrictions that can be put in place are dwindling.”
Morgan Stanley alongside Citi, and Deutsche Bank were also in the running for the deal.
Blackstone’s search for funding, being run by Eastdil Secured, also involves a refinancing of Logicor’s French portfolio. The company is searching for €400m (£286m) to refinance its €615m of French assets at a loan-to-value of 65%, also on a five-year term. Credit Agricole and BNP Paribas are competing for the deal. The margin is understood to have dropped to as low as 175bps. The French assets total 18.2m sq ft.
Blackstone is looking to reduce Logicor’s financing costs as it builds towards an exit of the business it established in 2012, either through an IPO or a trade sale.
A further 7.7m sq ft of assets across France, Spain and the UK will be added to the business through its $23bn (£15.3bn) deal to purchase the majority of GE Capital’s real estate business alongside Wells Fargo.
