January 2, 2022
Life Company Loan Funds Acquisition of 466,418-Square-Foot Distribution Warehouse Serving as Home Depot’s Valley Rapid Deployment Center
Phoenix, Ariz. – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $39.6 million to finance the acquisition of a single-tenant distribution center located in the Phoenix Southwest industrial submarket. The modern-era warehouse facility, located at 9081 W. Jefferson Street in the city of Tolleson, is 100% occupied by Home Depot in a long-term lease.
The build-to-suit property was originally developed in 2010 as Home Depot’s Rapid Deployment Center, a regional distribution hub for the home improvement retailer. The modern warehouse property features 32-foot clear height ceilings, advanced ESFR, 50’ x 54’ interior column spacing, 145 total speed bays, 195’ fenced truck courts with an automated gate, 60’ aprons and 10’ wide concrete dolly pads, and 171 overhead dock doors that are fully equipped.
Gantry’s Tim Storey, Principal, and Chad Metzger, Senior Associate, with the firm’s Phoenix production office secured the financing on behalf of the borrower, a privately held Tenant in Common (TIC) entity. The 10-year loan was placed with one of Gantry’s life company correspondent lenders at a 50% loan to value (LTV) and features a sub 3% rate and interest-only terms for the life of the loan.
According to Gantry’s Tim Storey, “Life company lenders remain active in financing industrial and warehouse properties in key distribution markets like Phoenix and, frankly, any of the key logistics markets throughout the country. Refinance, new acquisition, and appetite remains unabated moving into 2022. Quality deals for industrial real estate assets are extremely attractive to these lenders based on the performance of the asset class post-COVID. These lenders are staying competitive and current interest rates remain at historic lows with favorable terms often including interest only options. Modern, large footprint, logistics-serving properties like this with an established credit tenant in place are receiving competition from several of our lenders when sponsors come in at low leverage. This is resulting in highly attractive rates for legacy hold borrowers locking in historically low rates for high quality assets at 10- and even 15-year terms.”