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28 Aug 2020

Huge Self Storage Portfolio Gets a $93M CMBS Refi


Mack Burke

Finance Reporter

Originally posted on Commercial Observer.

New York-based Prime Group Holdings has nabbed a $93 million commercial mortgage-backed securities (CMBS) refinance from Rialto Mortgage Finance on a large self storage portfolio of assets located across the Mid-Atlantic and New England regions, according to ratings agency analysis of the transaction.

The 10-year CMBS loan, which will pay interest at a rate of 4.78 percent, includes five years of interest only payments, according to Fitch Ratings, which analyzed the deal. The financing retires $68.7 million in existing debt, returning $21.6 million in equity to Prime Group. It also covered almost $243,000 in upfront reserves and paid closing costs. The financing closed on July 21.

About $56 million worth of the loan total is being securitized in the Wells Fargo-led, roughly $560.5 million WFCM 2020-C57 CMBS transaction, while two remaining parri passu notes extracted from the $93 million mortgage loan will be included in future securitizations.

The portfolio was appraised in late June at around $135.6 million, per Fitch, which indicates an underwritten loan-to-value ratio from the loan’s originator at 68.6 percent.

Prime Group — an owner and developer based in Saratoga Springs, N.Y. that owns around $2 billion in self storage properties — began acquiring the portfolio’s 17 properties in 2013, the same year the firm was founded, and had been collecting them through 2015, according to Fitch. Altogether the portfolio comprises just under 925,000 square feet worth of space — which is 85.3 percent leased — across nearly 7,800 self-storage units within properties located in New York state, Pennsylvania and Maine.

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