Silicon Valley Office Asset Gets $ 155 Million Refi
Sansome Partners and Hunter Properties have secured a $ 155 million loan package to refinance a segment of Coleman Highline, an approximately 1.7 million square foot mixed-use development in the pandemic resilient technological city of San Jose, California, according to Commercial Observer. Goldman Sachs and Deutsche Bank are behind the financing of the Silicon Valley assets.
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Coleman Highline is a sprawling live work and gaming destination that will eventually include eight mid-rise office towers totaling approximately 1.5 million square feet, three amenity buildings covering a total of 53,000 square feet, a hotel Element of 175 keys, a public retail building and 1,600 housing units. As stated in the Commercial Observer article, the refinancing took the form of a CMBS debt that is part of the DBJPM 2020-C9 Mortgage Trust transaction of $ 630.8 million.
Moody’s Investors Service details Coleman Highline financing in its August 17, 2020 credit notice on DBJPM 2020-C9 Trust, which is backed by a pool of 30 loans secured by 146 commercial properties. Of the $ 155 million financing from Coleman Highline, a $ 30 million fixed rate loan with an interest rate of 2.8% is in the pool, with the remaining $ 125 million consisting of five banknotes. first rank pari passu to contribute to future securitizations.
According to Moody’s, Coleman Highline’s funding is secured by Coleman Highline Phase II, which includes the approximately 194,800 square foot office buildings in Building 3 and 163,300 square feet in Building 4, as well as the 22,900 square feet A2 building squares. “The properties are Class A office buildings designed to the highest quality standards by Gensler. Building A2, the amenities building, includes catering options, conference rooms and an auditorium ”, according to Moody’s document.
Hunter Properties’ development arm, Hunter Storm LLC, delivered all three structures in 2020 at a development cost of $ 249.1 million, and all three are leased to streaming platform Roku Inc. under a triple net lease agreement with an expiration date in 2030 and the option for a seven year extension. Roku now has a global headquarters at Coleman Highline which includes two additional Phase I buildings for a total area of approximately 738,000 square feet.
Moody’s cites a handful of strengths supporting Coleman Highline’s funding, including asset quality, leasing, sponsorship, and very important location. “The Coleman Highline property enjoys a location across a pedestrian bridge from the Santa Clara Caltrain station, the most widely used mode of public transportation between San Francisco and San Jose.” in the opinion of Moody’s. Additionally, the property is in the San Jose Airport submarket, which, according to a report from Cushman & Wakefield, was one of only two Silicon Valley submarkets to experience increased rents. offices in the second quarter of 2020.