CMBS JP Morgan Golden State Warriors

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Uber & Golden State Warriors Secure $600M CMBS Refi from J.P. Morgan for Mission Bay Towers

J.P. Morgan Chase has originated nearly $600 million in commercial mortgage-backed securities (CMBS) to the new Chase Center Towers in San Francisco’s Mission Bay neighborhood. The refinancing effort was led by the NBA’s Golden State Warriors and Uber, according to Fitch Ratings, which analyzed the transaction.

Located at 1655 and 1725 Third St., the towers span more than 586,000 square feet with ground floor retail space dubbed “Thrive City” and a 593-space parking structure, 145 of which are dedicated to Uber. There’s also an outdoor deck on the sixth floor of each building overlooking the central plaza.

According to Fitch, the five-year, fixed-rate and interest-only loan will pay upfront reserves and closing costs, return more than $200 million in equity to sponsors, and refinance almost $315 million in existing debt.

Chairman and CEO of the Golden State Warriors, Joe Lacob — through the GSW Sports ownership entity — and Uber each have a 45% ownership in the joint venture. Alexandria Real Estate Equities, a real estate investment trust based in Pasadena, Calif., owns the remaining 10% in the partnership, which was formed in early 2018.

The Chase Center Towers are an extension of the Warriors’ Chase Center, a brand new $1.4 billion arena in Mission Bay. GSW finished the arena last year, moving away from its original East Bay home in Oakland at the Oracle Arena, which was opened in 1966. As for its pedigree as a sponsor to this securitized mortgage, the team is the third-most valuable NBA team today, with a franchise value of $4.3 billion as of February 2020, according to a Forbes ranking of NBA team valuations.

To further take advantage and monetize the arena, the two towers, a hotel and retail spaces were built to create a commercial and entertainment district to further take advantage of and monetize the arena. This district will act as a catalyst for further commercial activity in Mission Bay, with Uber’s San Francisco headquarters as a type of mega-anchor tenant.

Uber is set to occupy both towers — Mission Bay 3 and 4 — on 20-year leases. The deal is part of a larger development consisting of a four-building campus spanning more than 1 million square feet of San Francisco office space, and supporting more than 7,000 employees, according to Fitch. Construction resumed earlier this month after being halted in March when stay-at-home orders were instituted due to COVID-19.

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