Prime Storage Arranges $590 Million Portfolio Refinancing

June 13, 2023

Self Storage Operator Lands New Loan as Cash Flow Improves

After bolstering the performance of several its self-storage properties, Prime Group Holdings, operator of Prime Storage facilities across the country, has lined up a $590 million refinancing of a portfolio of 45 facilities.

Citi Real Estate Funding is expected to close on the $470 million loan later this month. A $405 million portion will be rolled into a new commercial mortgage-backed security, according to analysis of the upcoming bond offering by Fitch Ratings. The refinancing also will include $120 million of new mezzanine debt.

A loan on most of the properties, 38 of 45, were previously securitized in the CGCMT 2019-PRM transaction. That loan was to mature next May, according to CoStar data.

On a same-store basis, Prime Group has increased revenue per available foot on the 38 properties by 56.3% to $20.16 from $12.90 since 2019, and increased net cash flow by 77.7% to $34.7 million from $19.6 million since the previous securitization, Fitch said.

The collateral for the CMBS offering is a $405 million component of a $470 mortgage loan with an assumed fixed rate of 6.39% for a five-year term and requiring monthly interest-only payments. The final interest rate is expected to be assigned at loan closing.

The 45 properties backing the new loan are branded as Prime Storage facilities and total 3.1 million square feet. The properties are in 23 different metropolitan areas across 15 states, with 31% of the portfolio in New York as Prime Group is based in Saratoga Springs.

The mortgage loan proceeds along with $120 million of mezzanine financing will be used to refinance approximately $575 million of existing debt.

Via CoStar