US insurer TIAA-CREF is jointly funding Gaw Capital Partners’ purchase of London’s 123-151 Buckingham Palace Road with MetLife, in a £274.1 million financing.
TIAA-CREF has advanced £124.6 million while MetLife is the lead investor providing £149.5 million. TIAA-CREF, advised by TH Real Estate, was introduced to MetLife by Gaw and its adviser, Eastdil Secured.
None of the parties has commented on the margin on the 10-year facility, but as Real Estate Capital reported last month, it is believed to be in the region of 175 basis points, reflecting the asset management needed because most of the leases in the 480,000 sq ft building complex expire in about 5 years’ time.
The 10-year, fixed-rate loan reflects a loan-to-value of 55 percent.
The two lenders have been partners on deals in the US before but this is their first joint underwrite of a European loan. It is the largest loan made by TIAA-CREF in Europe in the last year.
Christoph Wagner, director of debt strategies at TH Real Estate said “We are very pleased to have worked with MetLife’s highly experienced team to jointly deliver an attractive financing structure in a short timeframe to support Gaw Capital’s acquisition.”
MetLife has financed a number of acquisitions in the UK capital for Gaw over the last few years, including Marks & Spencer’s Waterside headquarters in Paddington; Milton Gate in the City of London; and Harbour Exchange in Docklands. They also have a relationship in the US.
Barry Worth, a director in MetLife’s London office, said the group was “delighted to have provided another loan to Gaw Capital Partners and help them acquire this landmark West End investment property.”
Peng Han Lee of Gaw Capital Partners said the acquisition “ is a rare opportunity to re-unite such a large estate in a prime area of London’s West End after two decades of separate ownership. The ongoing regeneration of Victoria both north and south of the station will further improve the location and increase demand for a high quality offices. We are excited to implement our business plan to create a unique offering.”