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Blackstone opts for refi over £435m sale of St Katharine Docks

By James Buckley - Monday, October 09, 2017 16:05

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Blackstone has withdrawn the £435m sale of St Katharine Docks in favour of a refinancing of the marina complex near Tower Bridge, CoStar News can reveal.

Blackstone hired CBRE in May to find a buyer for the mixed-use campus but it is understood that the decision to refinance was made when bids fell short of the asking price.

The decision to refinance the debt, which is currently held by Morgan Stanley, has echoes of the sales process for Devonshire Square. Morgan Stanley agreed a deal in May to provide a £320m senior loan to Blackstone to refinance Devonshire Square after the private equity firm tried to sell the estate for £500m. The five-year loan, which reflects a loan-to-value ratio of around 60%, is thought to carry a margin of around 280 basis points over three-month LIBOR. The deal refinanced a £220m acquisition loan from Goldman Sachs secured in 2012, as well as the £50m mezzanine loan. Global private markets investment manager, Partners Group then bought the £50m mezzanine loan secured by the estate.

Nick Leslau bought the St Katharine Docks development for £156m through his Max Property Group before selling it as part of a wider sale of its property business to Blackstone for £448m in 2014.

Under Blackstone’s ownership, St Katherine Dock’s has been largely refurbished and has let up well. Last December, the private equity group secured a lease of 55,800 sq ft to WeWork at International House, the recently refurbished 215,000 sq ft office building within the complex. Further public realm improvements were delivered by Blackstone earlier this year.

Max acquired St Katharine Docks in a 60% joint venture in August 2011 for £164.5m. The estate comprises 445,000 sq ft of offices, predominantly in International House, Commodity Quay and Devon House, with 70,000 sq ft of waterside restaurants, bars and shops and the 10-acre, 160 berth marina. Eurohypo provided senior debt at 55% LTV – or £86m – upon completion of Max’s purchase.

Blackstone declined to comment.

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