Financier TPG obtained Centuries Corporate Park, a six-building suburban office portfolio in Redmond, Washington, last month for $153.49 million.Suburban office homes are drawing renewed interest from business mortgage-backed securities lenders this summer, highlighted by two significant offerings being prepared for funds managed by major institutional financiers Brookfield and TPG. The two new single-borrower offerings are projected to total more than $750
million and must concern market this month. The offerings, Credit Suisse Wells Fargo Trust 2018-TOP and Morgan Stanley Capital I Trust 2018-BOP, will bring the total of similar summer offerings to $2.4 billion. By contrast, single-borrower offers backed by rural office homes totaled$990 million in the very first five months of the year, inning accordance with CoStar business mortgage-backed securities information tracking. Rural workplace markets have been outshining their city and central downtown counterparts of late, inning accordance with CoStar
data. Suburban vacancies declined to about 9.6 percent at the end of the second quarter from a high of about 13.4 percent 8 years ago. Need development for space in the residential areas has likewise been greater than need for city and main enterprise zone properties. Credit Suisse Wells Fargo Trust 2018-TOP, the bigger of the two offerings, is backed by a two-year, floating-rate business home loan totaling $530 million, with five, one-year
extension options made to affiliates of TPG Realty Partners II, a fund managed by TPG Real Estate. TPG Real Estate is the real estate investment platform of TPG, a leading worldwide personal investment firm with roughly$84 billion of assets under management. The loan is protected by first-mortgage liens on
the cost and leasehold interests in 15 mostly single-tenant office homes in 11 states, according to S&P Global Ratings’presale analysis. California, Washington
, and North Carolina comprise the states with the largest geographical concentration. The homes include Centuries Corporate Park, a six-building workplace portfolio in Redmond, Washington, that an
affiliate of TPG got last month for$153.49 million. The whole industrial mortgage-backed securities property portfolio is large and diverse, making up 3.06 million square feet, which was 97.9 percent-occupied by 26 unique tenants since June 1. The typical occupant tenure across the portfolio is 15 years.
The majority of the properties house tactical areas for nationally acknowledged tenants. Investment-grade renters make up about 71 percent of the occupancy and include such companies as Microsoft with 15.7 percent of net rentable location, Bank of America with 21.7 percent, drugmaker Bristol-Myers Squibb with 5.2 percent, banking business Wells Fargo at 8 percent, online merchant Amazon at 4.1 percent, health insurance provider UnitedHealthcare with 4.7 percent, banking company Barclays at 3.9 percent, management specialist Accenture with 2.9 percent, and agrochemical maker Syngenta AG at 3.8 percent. Morgan Stanley Capital I Trust 2018-BOP is backed by a two-year, floating-rate industrial mortgage loan amounting to$ 223.4 million, with 3 one-year extension alternatives, protected by 12 suburban workplace residential or commercial properties owned by affiliates of Brookfield Strategic Real Estate Partners II, a fund handled by Brookfield. Brookfield
Strategic Realty Partners II is Brookfield’s second massive worldwide property fund, with $9 billion in dedicated capital. Brookfield is a worldwide real estate business that invests across all residential or commercial property types. Brookfield’s core workplace portfolio presently consists of about 260 residential or commercial properties worldwide, amounting to 129 million square feet. The commercial mortgage-backed securities loan is backed by 12 properties leased to over 240 tenants throughout various industries. The biggest occupant by base lease only accounts for about 3 percent of net rentable location, as calculated by S&P Global Rankings. The home and tenant diversity is balanced out by the portfolio’s geographic concentration. Nine homes, representing
81 percent of the portfolio rental income, are located in the Washington DC area. The portfolio deals with significant occupant rollover risk during the initial two-year loan term with 25.3 percent of the leased location and 32.0 percent of the in-place rent expiring by 2020, as computed by S&P Global Scores.