Starwood in £200m Aldgate Tower refi

Starwood Capital has refinanced the Aldgate Tower in the City of London with a £200m loan.

The 317,000 sq ft office building reached practical completion earlier this month and is owned by Aldgate Developments. Starwood’s listed real estate debt fund, Starwood European Real Estate Finance, provided £45m and the Starwood Property Trust the remainder.

It is thought that the whole loan reflects a loan-to-value of 70% – 75%. The facility replaces an £85m loan issued by Helios Capital and GWM Group that was repaid six months prior to maturity.

The building is yet to conclude its first letting and the financing shows the willingness of lenders to take on vacancy and risk, particularly non-bank, alternative lenders.

A stock exchange announcement by the Starwood European Real Estate Finance said the deal would “support the acquisition and stabilisation through lease-up of the property”. It also stated that the loan’s interest rate is part fixed and part floating and that it would “earn an attractive risk adjusted return commensurate with its stated investment strategy”.

Aldgate Developments is close to concluding its first leasing deal at the building – marketing company Tag Worldwide has 40,000 sq ft under offer whilst early stage talks have also commenced with media company BskyB (30,000 sq ft), taxi firm Uber (40,000 sq ft) and shopping and energy company Maersk Group (20,000 sq ft).

The deal will rank among Starwood’s largest lending arrangements this year, which have included an extension of an existing loan secured against Almacantar’s Centre Point in the West End by £45m to £265m, a £101.8m loan for the development of residential scheme Baltimore Wharf in Docklands and a €99m facility to refinance the W Hotel in Amsterdam.