LBA Logistics taps CMBS market to refinance national industrial portfolio

Article originally posted on CoStar on October 4, 2024

LBA Logistics tapped the hot commercial mortgage-backed securities market to finance an industrial property portfolio located across 10 states, completing a $577.63 million deal for the 7 million-square-foot national portfolio.

Industrial CMBS single-asset, single-borrower offerings have already accounted for $18.5 billion in deals this year versus just $7 billion in all of last year, according to CoStar data. The deals include debt for data centers and self-storage properties.

Industrial property deals accounted for over 33% of the total CMBS deal volume from January to August of this year — marking a significant increase compared to 7% during the same period in 2023, according to the brokerage JLL. The increase in industrial financings is a combination of acquisitions, refinances and recapitalizations.

JLL worked on behalf of LBA Logistics to secure the floating-rate loan for a five-year term, inclusive of extensions, through a group of banks led by JPMorgan Chase, with Bank of America and Wells Fargo contributing. Final pricing for the deal was about 1.95% over the Secured Overnight Financing Rate, a benchmark interest rate used in the United States.

“This is the lowest pricing for a floating-rate industrial SASB since March, which is a testament to the strength of the sponsor, portfolio and strategy,” Kevin MacKenzie, executive managing director and national production leader for the JLL debt advisory team, said in a statement. “Being patient throughout the process and timing the marketing properly led to (it) being significantly oversubscribed, with spreads tightening across the capital stack, demonstrating the current demand in the market.”

The LBA Logistics portfolio refinancing involves 25 industrial properties across 10 states, all owned by the Chicago-based firm’s LBA Logistics Value Fund VII.

The properties are located in California, New Jersey, Utah, Washington, Florida, Georgia, Nevada, Ohio, Kentucky and Tennessee.

The largest building in the portfolio is a 552,700-square-foot cold storage distribution center at 10501 Cold Storage Road in Jacksonville, Florida.

The entire portfolio is fully occupied with a tenant mix spanning various industries, including web services, food and beverage, building materials and logistics.