Real Estate Forum - September 2010

large deal, but rather, how high they are
willing or able to go. As of the end of
August, that number appears to be $350
million, at least for a single company. But if
life companies continue to club on deals,
erties: Westfield Brandon Mall, near Tampa,
FL, and Westfield Old Orchard Mall, just
north of Chicago.

turn to a single-asset securitization.

Speaking generally, David Durning,
senior managing director with Prudential
Mortgage Capital Corp., says the company
would likely limit its exposure to $200 mil-
lion on an individual property, but for a
portfolio it could be significantly more. “We
have had an appetite for $7.5 billion overall
this year,” he says. “At midyear, we’re on
pace, if not slightly ahead. But the average
loan size is larger than what it has been his-
torically and we are doing fewer deals.”
Prudential looked at the 300 N. LaSalle
transaction, he reveals, but it was signifi-

SPENCER
GARFIELD
Hudson Realty Capital

that figure could stretch much higher.

The $350-million life loan was for one of the most momentous office trades of the year thus far—Chicago’s 60-story 300 N. LaSalle for $655 million, or $503 per square foot. It was certainly the largest deal the city had seen for at least five years. Newport Beach, CA-based KBS Real Estate Investment Trust II acquired the property from the developer, Hines Interests. It received a five-year fixed rate loan of $350 million from MetLife, which beat out other life insurance clubs and banks for the assignment. Holliday Fenoglio Fowler placed the debt as well as handled the transaction.

The rate on the loan was 4.25%, says
Mark Wilsmann, managing director and
head of real estate portfolio management
at MetLife. “That is a relatively low rate and
very attractive from the borrower’s perspec-
tive, but it is a spread of 275 basis points,
which is very wide based on where Treasuries
are right now.”
Increasingly, life companies have been
clubbing to finance larger deals in the
$300-million to $500-million range,
Wilsmann says, pointing to two examples.
City National Plaza in Los Angeles, where
the borrower—a JV of CalS TRS and Thomas
Properties Group—received a $350-million,
10-year fixed rate loan from a club between
MetLife, which ponied up $200 million, and
NYSTERS, which kicked in $150 million.
The other was a $365-million club loan split
50/50 between MetLife and Prudential that
was collateralized by two regional retail prop-