El-Ad Group — part of the Tshuva family of companies, which is one of the largest in Israel —recently secured $434 million in refinancing with JPMorgan Chase for a massive, 6.1-million-square-foot portfolio. The loan consists of senior notes to the tune of $231 million, a $172-million subordinate note, a $3-million mezzanine loan and $2 million in private equity.
The subordinate note and an initial $75 million tranche of the senior loan will be pooled under the $895.2-million, Deutsche Bank-led BMARK 2020-B18 CMBS transaction. The five-year loan has an interest rate of 4.63% per annum and will be used to pay off a previous loan on the portfolio, which was secured through MSC 2019-AGLN.
The Agellan portfolio was previously owned by the homonymous Canadian REIT, which was acquired by El-Ad last year for $510 million. The Israeli company subsequently assumed all associated debts, and the most recent appraisal of the Agellan portfolio put it at $551 million.
The portfolio includes 46 properties, most of which are flex industrial, warehouse and distribution facilities in Georgia, Florida, Illinois, Indiana, Kentucky, Maryland, Michigan, Ohio and Texas, as well as four office properties. Of these, the 482,497-square-foot Naperville Woods Office Center is the largest, with two of the Beltway buildings adding roughly 231,000 square feet of downtown Houston office space to the portfolio. The largest property on the list is a 906,500-square-foot industrial space in Sarasota.
The portfolio also boasts a tenant roster that’s 250-strong in industries such as health care, business services, biotech, manufacturing, insurance and retail. Some of the big names on the list include United Natural Foods (occupying 8.1% of the net rentable area), General Motors (leasing 7% of the net rentable area) and CEVA (at 5.8% of the net rentable area). Despite concerns regarding the high percentage of leases that are set to expire during the five-year term of the loan, the portfolio has been performing well amidst the current crisis. JPMorgan reported to Fitch that June’s rent collection came in at 96%, with none of the largest tenants reporting any issues in making rent payments.