Alterra Moves to Equity Pledge Framework Under $400M IOS Refi
Alterra IOS has changed the structure of its financing tied to a 99-property IOS portfolio through a new $400 million package. The new deal will replace the traditional asset-level mortgages with an equity pledge framework, which gives the industrial real estate platform more flexibility to underwrite and streamline execution.
More specifically, according to a statement from Scott Whittle, chief financial officer at Alterra, the refinancing will cut administrative and legal burden to help the firm grow its platform.
"Structures like this are becoming more relevant as institutional capital seeks efficient ways to access fragmented sectors at scale," Kate Mooney, Alterra's senior associate of capital markets, added in remarks.
"As IOS portfolios have grown and matured, lenders have developed greater comfort underwriting diversified portfolios rather than individual assets. Equity pledge facilities reflect that evolution and provide both borrowers and lenders with a more practical and efficient financing solution."
The bulk of the refinancing comes from Truist Financial Corp., which provided $225 million as the administrative agent, active bookrunner and joint lead arranger. KeyBank National Association, serving as the syndication agent, active bookrunner and joint lead arranger, issued $175 million under the deal.
The portfolio across 551 acres offers almost 2.1 million square feet of warehouse space. Every site is located in a major logistics or industrial market corridor in Florida, Georgia, North Carolina, Texas and California.
Alterra has noted that the refinancing has taken place after major recent fundraisings, citing a $244 million commitment from Blackstone Real Estate Debt Strategies, snagging $103 million to finance a purchase from PGIM and landing a $100 million credit facility.
Nadia Mahmoud, managing director at Real Estate Corporate Banking at Truist, sees IOS as one of the top compelling segments inside industrial, noting growing demand for financing solutions in the alternative asset class. Also, Joshua Mayers, senior vice president at KeyBank, said that the tailwinds come from the limited supply and strong demand seen in the space.
As of the second quarter, Alterra has acquired more than 495 IOS assets across 39 states.
Source: GlobeSt/ALM