Goldman Sachs is securitizing a $1 billion in commercial mortgage refinancing a logistics company’s network of temperature-controlled warehouse and distribution facilities nationwide.
GS Mortgage Securities Corp. Trust 2016-ICE2 is a seven-tranche offering of fixed-rate and interest-only notes backed the two-year, floating rate mortgage secured by fee interests in 43 public refrigerated facilities operated by Lineage Logistics Holdings LLC.
Standard & Poor’s has issued a preliminary ‘AAA’ rating to the $521.1 million Class A notes slice of the transaction, the largest tranche in the transaction. S&P gave an early ‘AA-’ rating to $110.9 million in Class B notes, an ‘A-’ rating to $95.3 million in Class C notes, a ‘BBB-’ rating to $107.5 million in Class D notes and a ‘BB-’ to $165.2 million in Class E notes.
A ‘BB-’ rating was given to the notional amounts of the Class X-CP and Class X-NCP interest-only notes that are expected to be based on $900,000 on initial balances of the other class certificates.
The loan, which has three one-year extensions, was issued by Goldman Sachs Mortgage and Morgan Stanley Mortgage Capital Holdings to 17 special-purpose entities owned or operated by Lineage Logistics. The loan is interest-only for the borrowers, with a floating rate equal to 3.73% plus Libor during the first two years and initial extension terms; then 3.98% plus Libor for the third extension term.
About 45% of Lineage’s cash flow is expected to be generated from the CMBS issuance, so the borrowers are structured as special-purpose entities owned or operated by Lineage that will have prohibitions on future debt.
S&P has calculated the whole commercial mortgage’s loan-to-value ratio at 80.6%, based on the appraised value. The rating agency considers this leverage to be “moderate” compared with other single-borrower transactions it has rated. The debt-service coverage is 1.36x.
The 43 properties are in 14 states in large metro areas such as Los Angeles, Chicago, Kansas City, Kan., Dallas/ Fort Worth, Atlanta, Philadelphia and New York. Lineage (which carries a ‘B’ corporate rating from S&P) is the second-largest operator of temperature-controlled warehousing and logistics facility in North America with 110 facilities in 21 states.
In addition to refrigerated space, Lineage provides warehouse services such labeling, unloading bulk package deliveries, packaging, pallet assembly and transportation/rental arrangements. These tend to attract longer lease agreements with sub-tenants
The securitization is expected to close March 22.
The transaction is the second rated Goldman Sachs commercial mortgage securitization this year, following February’s transaction that
