US insurer strikes deals to help refinance two London office buildings and an industrial portfolio
US insurance group Metropolitan Life Assurance Company has closed or agreed three large senior debt facilities already this year, totalling around £270m.
The group has been in London for 10 years, formerly as a passive investor in loans, but is stepping up its activity as a lender at a time when many banks are out of the market.
MetLife’s London office is headed by Paul Wilson, who this month re-hired previous MetLife employee Gary Waistnidge as a director of real estate investments.
“We are picking up activity in new senior lending,” Wilson said. “Last summer we started looking at a bit more and now we are starting to close the deals we were looking at then.”
Since January, MetLife has provided about half of a £154m senior loan with DekaBank to refinance the prime 330,000 sq ft MidCity Place for Beacon Capital in Holborn, London.
It also agreed to lend London & Stamford £133.25m to refinance a £205m portfolio of 10 prime distribution sheds; and provided around £70m of senior debt to refinance Vico Properties’ 17 Columbus Courtyard in Canary Wharf. Wilson said he couldn’t comment on how much the insurance group might lend in Europe this year.
“There is no finite amount,”he said. “If the deal flow is there, the money will come.” Wilson said MetLife had “no hard cut-offs” for loan-to-value ratios: “We own real estate and are real estate people.”
In the UK, the group saw itself as operating “as a step up from German banks that want a very low LTV”, Wilson added. “We want a decent property for a decent spread.”
Wilson said a typical example was 17 Columbus Courtyard, let to Credit Suisse: “We were attracted by the property and the long lease to a good tenant.”
MetLife provided a senior loan at a 65% LTV ratio to replace a previous £70m senior loan, which was securitised in the ELOC 22 CMBS as the Perseus loan, and has been repaid.
MetLife previously owned part of the £36m junior loan in the original financing. Duet Group structured the refinancing and its European Real Estate Debt Fund provided about £15.5m of mezzanine finance for the 65%-80% part of the capital structure, while Partners Group provided preferred equity capital at an LTV ratio above 80%.
Waistnidge had recently worked as a consultant to MetLife and previously worked for the group from January 2007 to August 2009. MetLife also uses Laxfield Capital to help source deals.