JPM Provides $455M CMBS Refi for Nationwide Suburban Office Portfolio

September 24, 2019

J.P. Morgan Chase has provided a $455 million refinancing for a nationwide group of suburban office assets controlled by Brookwood Financial, according to The Carlton Group, which advised Brookwood on the deal.

The debt package grants Brookwood — a private-equity firm based in Massachusetts — three years of floating-rate leverage on a portfolio of 27 properties concentrated in five regions: New England, the Dallas metro area, the region of Florida near West Palm Beach and Fort Lauderdale, the suburbs of Philadelphia and the environs of San Diego. Brookwood acquired the assets piecemeal over the years and the new deal, which was first reported by Commercial Mortgage Alert, represents the first time they’re being lent against as a group. The debt will find a place in an upcoming CMBS transaction, as per CMA.

“Brookwood Financial … wanted to move quickly to optimize its position within more than two dozen investments across the country ahead of changing market dynamics,” Michael Campbell, the CEO of The Carlton Group, said in a statement. “We were able to work closely with the sponsor’s team and J.P. Morgan Chase to structure a single transaction that allows Brookwood to buy out partners and gain maximum return on investment over the long term for a wide range of office properties.”

Joseph Geoghan led the J.P. Morgan team that originated the debt, while Brookwood’s Thomas Brown supervised the deal for the borrowers. Neither immediately responded to an inquiry about the deal.

The single most valuable asset covered in the refi is the McArthur Portfolio in Irving, Texas, a three-building campus that Brookwood bought in 2016 and that is now valued at more than $85 million, according to sources close to the deal. Tenants there include a company that makes ingredients for food manufacturers as well as a business- and I.T.-consulting company. Other prominent assets that back the debt include West Palm Beach’s Sabadell United Bank Building, a 114,000-square-foot office tower that serves as that institution’s headquarters, and Mission Valley Crossroads, a 140,000-square-foot property on Camino Del Rio in San Diego, about three miles north of the city’s central business district.

Brookwood, a 26-year-old company, has in the past owned everything from neighborhood retail centers to hotels, but its portfolio today is laser focused on suburban office holdings. An Iowa-based subsidiary, Yesway, is also active investing in gas stations and adjacent convenience stores, noting on its website that it aspires to own more than 400 such assets “over the next several years.”

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