PGIM Real Estate kept its industrial lending momentum rolling this week with a $333 million floating-rate financing package for asset manager GLP Capital Partners.
The top-ranked debt fund and private credit manager – based in Newark, New Jersey – originated two loans of $175 million and $158 million for the acquisition of three industrial assets across California’s high-demand Inland Empire region.
Santa Monica-based GLP will use the funding to acquire a collection of newly delivered buildings and two existing industrial projects.
Trevor Arnholt, vice-president at PGIM Real Estate, said the firm has strong conviction in the industrial sector – echoing a strategy outlined in recent weeks to affiliate title Real Estate Capital USA by the manager’s head of US debt originations, Melissa Farrell.
“PGIM Real Estate is committed to remaining active through market cycles, and, in this environment, we are seeing larger loan opportunities,” Arnholt said. “Year to date we have enjoyed the ability to write larger loans as part of our core-plus strategy, and we’re excited to continue this trajectory.”
Part of what is driving the increase in large loan opportunities for the private credit manager – akin to its peers – is the absence of national and regional bank lenders. “We think the air is thinner on these larger deals and we get better returns overall and better lending terms on some of those transactions,” Farrell told REC USA previously.
In 2021 and 2022, PGIM’s core loan size clocked in at around $40 million, but in the first half of 2023 was closer to $60 million for loans the manager was originating.
“It is a trend we like and a trend we can play in because we are large,” Farrell said. “So, we can take down a $200 million-plus [loan] whether it is single-asset or a portfolio, and we think that is a really great space that we play well in.”
PGIM has been an active lender in Southern California beyond the Inland Empire, extending its exposure to the greater Los Angeles area earlier in September with a similarly themed $455 million financing package for Alere Property Group, a developer based in Newport Beach, California.