Equus finances 52-property Phoenix industrial portfolio with $718.2M floating-rate package

Equus affiliates have financed Project Pegasus, a 52-property shallow-bay industrial portfolio of 5.2 million square feet across infill Phoenix submarkets. The $718.2 million package runs five years at a floating rate, Connect CRE reported Oct. 14.

The capitalization splits between a $527.1 million SASB execution — Morgan Stanley is lead left, Bank of America lead right — and a $191.1 million balance-sheet loan through Bank of America. That leaves roughly 27% of the total on Bank of America's balance sheet, with the larger share placed through a single-asset, single-borrower securitization.

JLL Capital Markets arranged the financing, led by Kevin MacKenzie, Jason Carlos and Frank Choumas. At closing the portfolio was 92% leased, and no single tenant took more than a small slice of rental revenue. Individual buildings run from roughly 29,000 square feet to nearly 259,000 square feet and average about 100,000 square feet. The average vintage is 1992, and the collateral spans established business parks as well as industrial built as recently as 2019. That vintage means the credit leans on the submarket and the rent roll rather than on the buildings themselves, while 52 buildings with no dominant tenant support the single-borrower execution.

A Daily Network report on Oct. 1 said CRE lenders expect values to fall with the 10-year Treasury at 5.3%, its highest since 2002. The floating coupon re-prices with the curve instead of fixing a rate for the full term, and the five-year term from this closing runs to 2031.