Saturday, October 12, 2024

Prime US REIT and KBS Complete $550 Million Refinancing Facility

Cindy Teo

 Newport Beach, CA – Prime US REIT, a Singapore REIT with the principal investment strategy of investing, directly or indirectly, in stabilized income-producing office assets in the U.S. and KBS, one of the largest owners and operators of premier commercial real estate in the nation, announce the completion of a major refinancing for the Prime US REIT portfolio. 

The new agreement has an aggregate principal amount of $550 million, comprising a $400 million term loan facility and a $150 million committed revolving credit facility.

 Prime US REIT trades on the Singapore Exchange Securities Trading Limited ticker as: OXMU. KBS serves as the U.S.-based asset manager for the portfolio, which includes helping to negotiate the credit facility. Prime US REIT’s portfolio consists of extremely well-located Class A assets with highly desirable amenities.

 

Rahul Rana

“The completion of this refinancing further strengthens our capital position, allowing us to make significant capital improvements across our portfolio, ensuring our buildings meet the highest standards of quality, sustainability, and tenant satisfaction," says Rahul Rana, CEO and Co-Sponsor of Prime US REIT.

 

"We are committed to providing exceptional spaces for our tenants and ensuring continued value for our investors. We are now better equipped to seize new opportunities and reinforce our commitment to long-term success.”

 

The Prime US REIT refinance highlights the strength of Class A office as tenants reimagine how they use office space, shining a positive light on the sector, according to Marc DeLuca, CEO and Eastern regional president of KBS.

 

“KBS assisted Prime US REIT with the financing in 2019 in conjunction with the initial listing on the Singapore Stock Exchange,” says DeLuca.

 

 “This refinancing marks another strategic move by Prime US REIT and demonstrates the ongoing appeal of premier office assets. While Class B and C office properties may be struggling due to shifting trends in office use, companies are continuing to gravitate toward well-located Class A office buildings with state-of-the-art amenities in key U.S. markets – the essence of the Prime US REIT portfolio.

 

"Employers are utilizing this space to attract their teams to the office in an increasingly competitive business environment.”


Marc DeLuca

As the U.S.-based asset manager for the portfolio, KBS’ active asset management strategies are focused on leasing. Leasing volume in the Prime US REIT portfolio more than doubled year-over-year in the first half of 2024, increasing from 131.2k sf to 268.6k sf.

 

The increase in leases executed in the first half of 2024 highlights improving tenant confidence in executing leases. The weighted average lease was 4.2 years as of June 2024. While the recovery of the office sector remains bifurcated across markets, new leasing demand is encouraging.



One Washingtonian Center in Gaithersburg, MD
 is a 14-story office building with a lakefront view,
 adjacent to Rio Shopping Center.


 The portfolio secured renewals and new signings at several assets including Reston Square, Promenade, 171 17th Street, Tower 909, 101 South Hanley, and One Washingtonian Center. 

 

“Prime US REIT is in a strong financial position, bolstered by this refinancing,” says Cindy Teo, CFO of Prime US REIT.

 

“The additional liquidity allows us to invest in critical capital improvements across our properties, enhancing the quality and longevity of our assets. By focusing these resources on upgrades and modernizations, we are positioning our portfolio for continued growth and ensuring sustained value for both our tenants and investors.”

 

KBS is also assisting Prime US REIT in an asset enhancement initiative at One Washingtonian Center in Gaithersburg, Maryland. The iconic 14-story office building with a lakefront view, adjacent to Rio Shopping Center, offers a diverse and eclectic mix of restaurants, shops, cinema and entertainment options.

 

The repositioning is slated for completion in the fourth quarter of 2024 and will feature a fully renovated lobby entrance, renewed tenant lounges, conference center, new full-service gym, and Grab & Go CafĂ© with banquette seating and direct water views. 


 Robert Durand

Despite the high cost of debt creating challenges in the capital markets, and many lenders pulling back on office financing, KBS has worked successfully with its lending relationships to refinance multiple loans for Class A office properties in 2023 and 2024.

 

KBS’ ability to work with all stakeholders to reach mutually acceptable terms and complete complex transactions in a challenging capital markets environment was instrumental in the original Prime US REIT bank facility loan and in the successful refinancing of this facility on Prime US REIT’s behalf, according to Robert Durand, executive vice president of finance at KBS.

 

“Our firm worked with Prime US REIT to establish the original credit facility as well as its refinancing, demonstrating our experience and the depth of our long-lasting lending relationships,” says Durand.

 

“Our in-house financing team has deep expertise in commercial real estate and the capital markets. After 32 years in the industry, we recognize how economic and real estate cycles run, and we know what financial institutions require in a qualified borrower and operator.

 

"Our long-standing relationships with lenders and a solid track record of success in office properties and operating integrity helped bring this transaction across the finish line.”

 

 

CONTACTS:

 

vivian Liu

vliu@thesmartagency.com

 

Ginny Walker

KBS Senior Public Relations Director

949-417-6535

gwalker@kbs.com

 

Lexi Astfalk or Sophia Reznicek

The Smart Agency

949-438-6262

KBS@thesmartagency.com

 

www.kbs.com.

 

Prime US REIT Investor Relations

T: (65) 6951 8095

E: info@primeusreit.com