On behalf of Hartz Mountain Industries, Inc., Jones Lang LaSalle’s Capital Markets experts secured $48 million in Credit Tenant Lease financing for an industrial warehouse/bus maintenance complex located in Newark, New Jersey.
A foreign CTL investor provided the 4.323 percent, fixed-rate, 24-year loan for the 21.7 acres of land and 638,092 s/f property known as 601 Doremus. The property is leased to New Jersey Transit Corporation through 2036.
Managing director Joe Garibaldi and executive vice presidents Bill Cavagnaro and Brion Haist led the Jones Lang LaSalle team on this transaction.
“This was an extremely complex financing assignment for a very unique property that involved a modified industrial condominium regime. The loan provides financing for a critical facility for New Jersey Transit, in which the entire city’s buses are maintained,” said Garibaldi. “Through the strength of the tenant, as well as the owners, we were able to unlock substantial trapped value in this essential property.”
This type of credit tenant lease financing derives its proceeds from the direct sale of bonds to investors in the global capital markets, not from capital by commercial real estate lenders. CTL financing is best applicable to single tenant properties occupied by investment-grade tenants under long-term triple-net leases, such as this.