Morgan Stanley refinances Blackstone’s Devonshire Square with £320m loan

Morgan Stanley is providing a £320 million senior loan to Blackstone to refinance its Devonshire Square mixed-use estate in the City of London.

The investment bank is providing the five-year term loan priced at around 280 basis points over three-month LIBOR. The facility reflects a loan-to-value ratio of around 63 percent, according to Estates Gazette, which first reported the financing.

Last summer, it was widely reported that Blackstone was aiming to sell the 630,000 square foot estate for £550 million, although it was subsequently withdrawn from the market in favour of a refinancing.

Blackstone bought Devonshire Square for around £330 million in 2012 from Rockpoint and the Abu Dhabi Investment Authority. The purchase was financed by a £210 million whole loan provided by Goldman Sachs. AXA Investment Managers – Real Assets subsequently took a participation in the deal. The blended margin on Goldman Sachs’ five-year finance was thought to be around 400 bps.

Morgan Stanley has previously financed the estate. Rockpoint had bought the 13 linked buildings for £410 million in 2006 at a 4.6 percent yield with a £340 million Morgan Stanley loan, of which £290m was securitised in the Triton ELoC 26 CMBS. The loan was due to mature in October 2011, but was extended to April 2013. Rockpoint bought the junior loan at a discount to keep control of the property.