Commercial and Multifamily Briefs From JLL, TPG RE Finance Trust, VICI Properties

JLL Adds Cost Segregation to List of Valuation Advisory Services

JLL, Chicago, added cost segregation analysis services to its Valuation Advisory offerings.

The new service is led by the Renewable Energy team and will enable its infrastructure and renewable energy clients, as well as owners of traditional commercial real estate, to maximize their tax benefits.

Cost segregation is an analysis on the accelerated depreciation for real estate. It looks at the building’s components to find qualified property that may decrease an owner’s tax liability. This type of analysis identifies shorter-life property, or personal property such as furniture, fixtures and equipment, from longer-life property, which is “real” property. The result can lead to lower taxable income and taxes due, thus increasing cash flow into the business and allows an owner to reinvest the savings for growth. 

“The U.S. government allows accelerating depreciation for certain building assets, and cost segregation plays a vital role for the client,” Vu said. “By componentizing a client’s building and applying advanced tax rules and regulations, they can improve their cash flow and reduce their tax burden.”

TPG RE Finance Trust Prices $1 Billion Commercial Real Estate CLO

TPG RE Finance Trust, Inc., New York, priced TRTX 2022-FL5, a $1.075 billion managed commercial real estate collateralized loan obligation.

The company placed $907.0 million of investment grade bonds with institutional investors, providing TRTX with term financing on a non-mark-to-market, non-recourse basis. TRTX 2022-FL5 includes a two-year reinvestment period, an advance rate of 84.4%, and a weighted average interest rate at issuance of Compounded SOFR plus 2.02%, before transaction costs. The transaction is expected to close on February 16, 2022 and is subject to customary closing conditions.

Since January 2018, including this issuance, TRTX has issued five CRE CLOs totaling $5.5 billion in support of the Company’s long-standing strategy of using primarily non-recourse, non-mark-to-market liabilities to fund its investment portfolio of transitional first mortgage loans.

Wells Fargo Securities, LLC is acting as sole structuring agent, co-lead manager and joint bookrunner for TRTX 2022-FL5. Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC are acting as co-lead managers and joint bookrunners, and Barclays Capital Inc. and BofA Securities, Inc. are acting as co-managers.

VICI Properties Inc. Expands Borrowing Capacity With $3.5 Billion Unsecured Credit Facility

VICI Properties Inc., New York announced a new and undrawn $3.5 billion unsecured credit facility consisting of a four-year $2.5 billion senior unsecured revolving credit facility and a three-year $1.0 billion senior unsecured delayed-draw term loan.

The real estate investment trust said the credit facilities were substantially oversubscribed with support from 17 new and incumbent financial institutions. Concurrently, the company terminated its existing $1.0 billion undrawn secured revolving credit facility and all liens securing the company’s existing credit facilities and related subsidiary guarantees were automatically released.

The revolving credit facility matures on March 31, 2026 and can be extended for two successive six-month terms. The facility bears interest at SOFR plus 132.5 basis points. The company has an option to increase the revolving facility by up to $1.0 billion and/or increase the Delayed Draw Term Loan by up to $1.0 billion assuming one or more lenders (from the syndicate or otherwise) agree to provide such additional credit extensions.

J.P. Morgan Chase Bank, N.A., Wells Fargo Securities, LLC., BofA Securities, Inc. and Citibank, N.A. served as the Joint Lead Arrangers on the Credit Facilities with J.P. Morgan Chase Bank, N.A. acting as the Administrative Agent and Wells Fargo Bank National Association, Bank of America National Association, and Citibank, N.A. acting as the Syndication Agents. Documentation Agents were Barclays Bank PLC, BNP Paribas, Capital One National Association, Citizens Bank, N.A., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., The Bank of Nova Scotia, and Truist Bank. Other bank participants were The Huntington National Bank, KeyBank National Association, Raymond James Bank and Sumitomo Mitsui Banking Corp.