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November 20, 2018
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OC’s Airport Business Center Refinanced with $170 Mil in Funding

1/30/18

The Koll Company has obtained $170 mil in new financing for Airport Business Center, an office/flex industrial park in Irvine. The loan was split into a $150 mil senior loan awarded to Wells Fargo, with a real estate debt fund controlled by Brookfield originating the $20 mil mezzanine loan. The financing was arranged by CBRE Capital Markets’ Debt & Structured Finance team.

The new loan has a 10-year term and carries an all-in fixed interest rate in the mid-4% range. This loan will refinance a loan that CBRE and The Koll Company originated in October 2014 with Brookfield and Morgan Stanley.

The loan was facilitated by Sharon Kline and Marina Massari of CBRE’s Newport Beach office. Daniel Vagnier of Chatham Financial provided defeasance strategy advice to Koll.

“The decision was made during mid-2017 to test the financing markets ahead of the 2019 maturity on the existing loan. This decision was based on several factors: The property fundamentals are very strong with occupancy at around 97% and rents up significantly since the 2014 closing; a belief that interest rates would be substantially higher at maturity in late 2019; and the opportunity to reduce debt service and enhance cash flow,” said CBRE’s Kline.

Discussing the reasoning behind the refinance, The Koll Company Managing Principal, Gerald Yahr, commented, “This refinancing allowed us to eliminate the near-term risk of a refinance in 2019, secure long term debt while rates are at historically low levels while reducing debt service and increasing cash flow for this legacy asset.”

Airport Business Center has had continuous ownership and management since The Koll Company purchased the land and initiated construction in 1969. With 68 buildings and 509 units on a 75-acre campus, the 1.2 msf property is one of the premier business parks in Southern California.





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