Banks back Blackstone’s $1.9bn RioCan REIT acquisition

Wells Fargo and J.P. Morgan are reportedly financing Blackstone’s $1.9 billion purchase of a 49-property US shopping center portfolio from RioCan REIT of Toronto, and they are looking to syndicate the $740 million senior portion of the loan.

Wells Fargo and J.P. Morgan are reportedly financing Blackstone’s $1.9 billion purchase of a 49-property US shopping center portfolio from RioCan REIT of Toronto, and they are looking to syndicate the $740 million senior portion of the loan.

The $918 million floating-rate financing, which carries a two-year term and three one-year extension options, consists of the $740 million senior loan that will be syndicated and an additional $178 million mezzanine loan, according to Commercial Mortgage Alert.

The debt will be collateralized by 27 of the properties encompassing 5.5 million sq ft and valued at some $1.2 billion, with 14 in Texas, seven  in Pennsylvania, and the others are in New Hampshire, New Jersey and New York.

RioCan said in December that the sale of the portfolio to the Blackstone Real Estate Partners VIII fund would help fund its acquisition of 23 properties from Kimco Realty Corp. and pay off other debt.

“The sale will enable management to focus exclusively on RioCan’s operations in Canada, including its significant development pipeline,” Edward Sonshine, CEO of Toronto-based RioCan, said in the statement at the time.

Blackstone’s first purchase out of the fund included the acquisition of $3.3 billion in US holdings, mainly office buildings in Southern California, Seattle and Chicago, from General Electric last year. Blackstone’s debt arm also purchased $4.6 billion of mainly US senior loans from GE via Blackstone Mortgage Trust (BXMT).

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