BlackRock Real Assets has provided a mortgage loan of 20 million pounds to Cerberus Capital Management LP. The capital will be used to refinance eight of the 15 buildings that make up the Quorum Business Park, a UK-based office park.
LONDON – June 25, 2018 – BlackRock Real Assets has provided a GBP £20m first mortgage loan to an affiliate of Cerberus Capital Management, L.P. (“Cerberus”) to refinance 8 of the 15 buildings that comprise the Quorum Business Park, an office park located 4 miles north of Newcastle city centre in the UK.
The asset comprises almost 500,000 square feet of modern Class A office space constructed primarily between 2009 and 2012 and is managed by Broadoak Asset Management. Four buildings are 100% occupied, and the other four are in various stages of lease-up. The loan has an initial funding of £15m, with a further £5m available once certain capital improvement conditions have been satisfied.
Eduard Mantz, Originator for Real Estate Debt Europe at BlackRock, commented: “Cerberus has been a repeat borrower of the BlackRock Real Estate Debt team, both in the US and Europe. We are very pleased to have been able to support this renowned investor in their commitment to one of the premier business parks in the North of England. Our Real Estate Debt team has been active for 20 years. This transaction demonstrates our expertise in underwriting buildings in regional markets and our ability to structure bespoke financings.”
Robert Falls, Managing Director of Cerberus European Servicing, added: “Since taking ownership of this property in 2012, we have steadily grown its occupancy and plan to continue to increase its use going forward. We have seen strong demand in the market, and with our recent investments in upgrades and sub-division modifications we will better accommodate tenants of all sizes and needs. BlackRock is a trusted lending partner, and we look forward to collaborating with them further as we move forward with our broader commercial real estate strategy in the region.”
Fergus Trim, Director of Broadoak Asset Management, said: “This financing showcases the increasing institutional demand for investments in the UK regional office markets. Attracting international investors of the calibre of Cerberus and BlackRock is a vote of confidence in both Quorum and the Newcastle office market. Prospects have improved in Newcastle in recent years, fuelled by multiple years of positive net absorption, low levels of new development, and office conversions reducing secondary stock. Newcastle availability of Grade A has tightened, and this historic low vacancy has resulted in upward pressure on rental levels.”