The next single-borrower commercial mortgage securitization refinances a portfolio of industrial properties acquired this year by Global Logistic Properties.
The $766.5 million CSMC Trust 2015-GLPA is backed by a single, fixed-rate whole loan secured by a fee interest in 114 industrial properties totaling 26.9 million square feet located in nine states including California, Maryland, Illinois, Texas, New Jersey, Tennessee and Indiana.
The $966.5 million loan, which was originated by Column Financial and Morgan Stanley Mortgage Capital Holdings on Nov. 4, has a term of 10 years and pays only interest, and no principal, for its entire term, according to Moody’s Investors Service. The property securing the loan is also encumbered by two mezzanine loans totaling $330 million that are co-terminus with the first mortgage.
GLP is the second largest logistics space owner in the United States, after Prologis, with approximately 173 million square feet. But it only entered this market in February with its $8.1 billion acquisition of IndCor Properties from the Blackstone Group. That was followed by the acquisition of 200 U.S. warehouses from Industrial Income Trust for $4.6 billion.
It’s not clear from Moody’s presale report how many of the properties ultimately backing CSMC Trust 2015-GPLA came from either the IndCor or ITT portfolios. However most of the properties (93.4%) are classified as warehouses, another 4.1% are light industrial proprieties and 2.5% are “flex” properties. Construction dates range between 1963 and 2014 and reflect an average age of 14 years. And as of Oct. 1, the portfolio’s weighted average occupancy rate was 94.4%.
Among the deals strengths, according to Moody’s, is the granularity of the portfolio and tenant base: the 114 properties are occupied by 193 tenants. Also, typical leases have terms of 10 year, though the weighted average remaining term is 5.2 years.
Moody’s cites as concerns the fact that the loan does not benefit from amortization during its term and that approximately 37.3% of the portfolio is situated in “greenfield” markets, or markets with undeveloped land. These properties will generally be subjected to new supply as rent growth justifies new development
Another concern is the fact that approximately 55.2% of the portfolio is represented by single tenant.
Moody’s expects to assign a ‘AAA’ rating to $437.6 million of senior, class A notes with a debt service coverage ratio of 2.48 and a loan-to-value ratio of 53.1%.
KeyBank, National Association will be the master servicer and Aegon USA Realty Advisors will be the special servicer for this transaction.