DekaBank has provided £100m of refinancing for 90 Long Acre, an office building in Covent Garden, London.
US private equity firm Northwood Investors paid circa £165m for the 194,000 sq ft building with existing debt of £121.5m in place last May. The loan associated with the asset was part of a wider securitisation – Lehman Brothers’ Windermere XI CMBS.
Deka’s five-year term refinancing is a defensive real estate play, and sits alongside new equity injected by Northwood. The facility is thought to be moderately levered at around 55% LTV.
The multi-let building is the UK base of Wells Fargo’s real estate lending team. Since ownership, Northwood has increased occupancy to near capacity having refurbished and re-let available space as and when it has become available.
The margin on the new debt was not disclosed but Deka, which has one of the lowest costs of funding in the market for property lending, has been a competitive lender in central London.
In May the German bank financed the £245m purchase of Sixty Holborn, Amazon’s new London headquarters, at a margin rumoured to be below 150 basis points. Hines bought the building for a German pension fund.
During the same month it provided a facility of around £155m for Tishman Speyer’s acquisition of 33 Holborn from German open-ended fund Union Investment. Leverage on the asset was understood to be 50% LTV with pricing just higher than 150 basis points.