LA investment firm Preylock scores $581M loan for Amazon-leased warehouses

UPDATED, Aug. 3, 2022, 9:40 a.m.: Preylock Real Estate, an investment firm based in Century City, has secured a loan in connection with its acquisition of eight Amazon-leased warehouses across the country, The Real Deal has learned.

Goldman Sachs provided the $581 million floating-rate, interest-only loan to Preylock late last month, according to a Moody’s report. The investment bank had issued multiple loans to Preylock between August 2021 and March of this year, all of which were then packaged into a single commercial mortgage-backed securities loan.

The loan is set to expire next year, though Preylock will have the option to extend the maturity through 2024. Preylock and Goldman agreed to a 3 percent interest rate cap — a limit that has already been reached, as the secured overnight financing rate rose to more than 2 percent last month.

With a 3 percent interest rate, Preylock is paying roughly $726,250 a month on the loan.

Together, the warehouses are valued at $1.3 billion, or $209 per square foot, Moody’s said, citing appraisals from CBRE.

Preylock’s larger limited partners include a sovereign wealth fund, an insurance firm and wealth management company, according to a source familiar with the matter. In November, Preylock also said it had teamed up with Bahrain-based GFH Financial Group to buy 14 Amazon-leased warehouses across 11 states in the U.S. in a deal valued at $2 billion.

Amazon has signed leases for at least another 10 years at all properties guaranteed by the Goldman Sachs loan. The properties were built in 2020 and 2021. They span more than 6.2 million square feet and are located in Indiana, Pennsylvania, Ohio, Louisiana, North Dakota, New Mexico, Arkansas and Alabama.

The largest is an almost 3 million-square-foot development with 90-foot clear heights in Albuquerque, which is valued at $355 million. The 24-hour fulfillment center at 12945 Ladera Drive NW opened last year — one of the hundreds that Amazon opened during the pandemic to meet online shopping demand.

Amazon currently pays an average of $6.30 per square foot a year in total rent at the warehouses, a source familiar with the portfolio told TRD. In some markets, Amazon is paying nearly double the average asking rent — in North Little Rock, Arkansas, industrial rents average $5.50 per year, Moody’s said.

Founded in 2016 by Brett Lipman and Steve Shokouhi, Preylock has amassed $4 billion of assets under management — mostly office and industrial properties. In Los Gatos, the firm owns part of Netflix’s headquarters campus at 131 Albright Way. Last year, the firm sold a 158,000-square-foot office building in Torrance for $45 million.

Preylock declined to comment.

This story has been corrected to reflect how much Amazon is currently paying in rent across the portfolio, rather than the underwritten base rent from Moody’s.