SAN DIEGO¡ªCommercial real estate developer The Allen Group recently announced it have secured a $20 million bridge loan for the recapitalization of 1,031 acres within the Dallas Logistics Hub (DLH).
The DLH is a 6,000 acre multi-modal logistics- and manufacturing-focused industrial park, which is being developed by the Allen Group. And it is the largest new logistics park currently under development in North America, according to the Allen Group.
According to a statement issued by the Allen Group, the 36-month, adjustable rate bridge loan with American Bank of Texas was obtained with the assistance of Holliday, Fenoglio Fowler LP.
Ken Howell, CFO of The Allen Group, told LM that this loan allows the company to pay down debt that was coming due in 2008 and 2009, close on a 62-acre parcel that was in escrow, and provide two years of interest reserve.
¡°Securing a land loan in today¡¯s climate has become onerous, if not impossible for most developers,¡± said Howell. ¡°This loan made a big statement in a down market, that a lender was very comfortable with the long-term prospects of the Dallas Logistics Hub, and The Allen Group¡¯s ability to develop it.¡±
Howell also said that this loan does not have a direct impact on the development schedule for the DLH. But he did say that it will have an indirect impact on its schedule, as it will pave the way for dialogue with other lenders as The Allen Group seeks a credit facility for infrastructure. An infrastructure facility, he said, will open thousands of acres in the Allen Group¡¯s 6,000 acre project for sale or development.
The DLH, which had an official groundbreaking ceremony for its first two industrial buildings in November 2007, is master-planned for the potential development of 60 million square feet of vertical logistics and manufacturing space. It is adjacent to Class I railroad carrier Union Pacific¡¯s intermodal facility, the BNSF rail line, major highway connectors¡ªI-20, I-35, I-45 and the proposed Loop 9¡ªand Lancaster Airport, which is in the master stages to facilitate cargo distribution. DLH development is part of four cities in Texas: Dallas, Lancaster, Wilmer, and Hitchins.
The past six months have been very busy for The Allen Group at the Dallas Logistics Hub, according to Allen. Some examples of this activity include: ¨C BNSF Railway acquiring 199 acres in May, and the beginning of construction on a 175-acre project for ADESA Auto Auction and a 15-acre project for a subsidiary of Maersk.
¡°We are having lots of conversations with potential tenants at DLH¡ªtenants seeking rentable space and end users seeking land to acquire,¡± said Howell. ¡°With the capital markets in disarray, tenants are moving much slower toward commitment throughout the marketplace. [And] with our proximity to the UP intermodal facility, the anticipated BNSF intermodal terminals, and Interstates 20, 35 and 45, we believe we are well-positioned to meet their needs when they receive the green light to move forward.¡±
