Bank of America Merrill Lynch has launched the year’s second European CMBS, a €132.9 mln securitisation against Starwood Capital’s €416 mln secondary Spanish office portfolio.
Taurus 2021-2 SP will securitise part of a senior loan made by the bank in August 2018 and upsized in September 2019, at a margin of 2.5%.
According to a presale report from rating agency KBRA, the total senior loan balance outstanding is €269.9 mln. There is also €49.4 mln of mezzanine debt in place making total debt of €319.5 mln. The senior is comprised of a €247 mln senior loan and a €22.9 mln capex facility.
The loan is for three years from September 2019 with 2 x 1 year extensions.
The eight mainly multi-let assets total 211,712 m2 and are 77% occupied with six (83% by value) in Madrid submarkets and two in Barcelona. In all, there are 171 different tenants.
Since Starwood assembled the portfolio via three deals between 2018 and 2019 occupancy has increased by 4% and rents by 5%, according to KBRA. Drago Capital is the asset manager.
The presale report says Starwood reported 99% rent collection for the six-month period last year from March to September. However, 21 tenants, accounting for approximately 10.0% of gross rental income, were provided rent relief over this period, of which approximately 7.0% remains outstanding.
‘Rent relief was generally provided via deferred rent, rent frees, and service charge free periods. There are current discussions with four tenants accounting for approximately 3.0% of GRI for further rent relief’, the report says.
The assets include 86,875 m2 San Fernando business park next to Madrid-Barajas Airport which Starwood and Drago bought in 2018 from Oaktree and Freo; and 78,500 m2 of space across another five assets in the Heritage portfolio, acquired from the same vendors.
The 33,500 m2 Omega office park 18 km north east of the Madrid CBD was bought from socimi Autonomy together with the Pallars building on the edge of 22@ in Barcelona.
BAML successfully sold the year’s first CMBS this month. Taurus 2021-1 UK is secured on Blackstone’s Mileway logistics assets acquired in the UK since the start of 2020.
