Charlotte, North Carolina (May 22, 2024) – KBS, one of the largest owners and operators of premier commercial real estate buildings in the nation, announces it has secured a $38,350,000 million loan to refinance Crossroads Distribution Center, a four-building, 496,723 square-foot industrial property in Charlotte, North Carolina. Additionally, the firm recently negotiated a two-year loan extension for Providence Towers, a 524,143 square-foot Class A office property in Dallas, Texas.
The activity highlights the importance of KBS’ deep knowledge and trusted lending relationships in driving the firm’s ability to execute commercial real estate financing transactions even in a challenging capital markets environment, according to Robert Durand, executive vice president, finance for KBS.
“KBS has more than three decades of institutional experience in owning and operating top-tier commercial properties in markets positioned for growth,” says Durand. “Our internal financing team understands how to structure the capital stack for strong asset performance even in the currently challenging capital markets environment. This transaction is an excellent example of our ability to find financing structures that maximize returns for our investors at every phase of the real estate cycle.”
Allen Aldridge, asset manager of Crossroads Distribution Center and senior vice president/co-director of asset management for KBS, adds that Crossroads is an example of a high-quality, well-performing asset in a great area.
“Crossroads Distribution Center is a highly desirable distribution facility in a top industrial market,” says Aldridge. “It is accessible to rail, road, air, and water transportation, including ports along the Eastern seaboard. As the Southeastern U.S. population maintains its growth trajectory, well-located logistics sites like this one are expected to continue to perform.”
Aldridge adds that the strength of the asset is further demonstrated through its strong occupancy and long-term, quality tenants. For example, KBS recently completed a lease renewal with the largest tenant at Crossroads, to remain at the property.
According to Newmark’s Q4 2023 National Industrial Trends report, e-commerce is forecasted to account for 17% of total retail sales by 2026, up from about 15% in Q3 2023. The Southeast led much of the nation in 2023 industrial net absorption growth, with Charlotte ranking ninth for total absorption last year at 7.0 million square feet. The Southeast has also experienced the fastest rent growth with four cities in the top 10 including Charlotte with 18% year-over-year rent growth.
Newmark also notes that while securitized debt financing has fallen from its 2021 peak, industrial liquidity looks to improve based on the sector’s strong cash flow fundamentals, particularly compared with other sectors competing for limited capital.
“Though the commercial real estate capital markets continue to contend with higher interest rates, we were able to leverage our financing expertise to close a refinancing transaction that recapitalizes the property for continued success,” says Durand. “This ongoing financing activity speaks to our in-house team’s expertise in working with reputable lenders regardless of the economic climate.”
Crossroads Distribution Center features four concrete tilt-wall warehouse buildings with ceiling clear heights ranging from 24-feet to 30-feet. All the buildings have 50-foot concrete aprons and truck courts that range from 110 to 140 feet. The site’s tenants include a range of businesses that sell and distribute products imported into the U.S., most of which are shipped into the country via container ships. Amenities at the property include a fitness center, tenant lounge, onsite car wash/detail, and proximity to public transportation, as well as nearby dining, shopping, and entertainment.
Joe Donato, vice chairman of Newmark, and his team assisted KBS in the refinancing.
“The combination of a top tier sponsor like KBS with a well-leased, multi-tenant industrial property led to a very competitive process. This is exactly the opportunity lenders seek in the current environment.”
Crossroads Distribution Center is located at 11401, 11415, 11435, and 11445 Granite Street in Charlotte, North Carolina. For photos please visit: here.
Providence Towers is located at 5001 Spring Valley Road in Dallas, Texas. For photos please visit: here.
