Prudential reenters Canadian market with $148m loan

Prudential Mortgage Capital Company’s mortgage lending arm has made its first loan origination in Canada in two decades.

The 10-year, $148 million loan to Prologis, Inc. refinances an eight-property industrial portfolio totaling nearly 3.5m sq ft across the Greater Toronto Area.

The “quality of the properties and solid fundamentals of the local market” made for an opportune re-entry into Canada, said Christy Lockridge, principal of originations at Prudential Mortgage Capital Company, in a statement.

Approximately $24 billion worth of property was sold in Canada through mid-December 2015. And experts say Canada’s industrial sector is in a significant recovery mode as the low Canadian dollar fuels exports and boosts manufacturing.

“Despite Canada’s finite investable marketplace, it is very much on the investment radar screen,” said Bill Argeropoulos, a principal of research with Avison Young, in a recent report. “Domestic players [are] increasingly facing off with foreign buyers who are raising their real estate investment allocations.”

David Durning, CEO of Prudential Mortgage Capital Company, went one step further, stating that “Canadian commercial real estate markets are among the most attractive in the world, with a strong demand for commercial real estate debt.”

The buildings, constructed between 2006 and 2014, include ceiling heights up to 32 feet and are fully leased to 16 tenants including PepsiCo and Ikea.

Prologis, Inc., as of December 31, 2015, owned or had investments in properties and development projects expected to total approximately 670 million sq ft in 20 countries, according to the company site.