Austin Portfolio Financing Completed

AUSTIN, TX-Thomas Properties Group has restructured and recapitalized financing on its 3.5-million-square-foot, 10-asset commercial office portfolio. The agreement meant the Los Angeles company and its partners, including Lehman Brothers and California State Teachers’ Retirement System, were able to restructure a $292.5-million credit facility.

Thomas Properties’ executive vice president John R. Sischo says the agreement followed a suit filed against New York City-based Lehman Brothers when the latter failed to fund a $100 million commitment on the class A portfolio. Sischo tells GlobeSt.com that the logical solution was to restructure the facility so that other partners’ money would be senior to that of Lehman’s.

While Lehman reduces its exposure through the arrangement to $60 million and 50% ownership, Thomas Properties has money to deleverage the portfolio. Thomas Properties, indirectly through its CalSTRS joint venture, holds a 6.25% interest. The Lehman Brothers Bankruptcy Court judge approved the Austin debt restructure on March 25, 2009, according to a press release from Thomas Properties announcing the restructuring.

“Lehman continues to be a partner and still has a funding obligation with this loan for $60 million,” Sischo adds. “But we structured this to be a transaction that could support the portfolio on a long-term basis.”

He goes on to say that the portfolio is approximately 90% occupied, and Thomas Properties is holding it long term. The properties in the portfolio consist of 300 West South Sixth Street, Frost Bank Tower, Great Hills Plaza, One American Center, One Congress Plaza, Park 22, Research Park I & II, San Jacinto Center, Stonebridge Plaza II and Westech 360.