Menlo Equities Targets Stabilized Office Buildings Leased to Investment Grade Tenants with Syndicated Facility from PNC Real Estate

Menlo Equities LLC, headquartered in Palo Alto, California, is a vertically integrated, privately held commercial real estate company engaged in the acquisition, development and operation of properties in select markets in the Western United States. The company currently manages approximately $2 billion in real estate assets, primarily in the technology sector.

Most recently, Menlo completed the initial closing of its latest fund, Menlo Equities Absolute Return Fund (MEARF), a long-term investment vehicle focused on acquiring and operating core and core-plus office properties leased long term to investment-grade-rated and creditworthy tenants. As part of the formation, Menlo turned to PNC Capital Markets LLC as Lead Arranger and PNC Bank, National Association as Administrative Agent to provide and arrange the initial financing for the fund.

The PNC-led credit facility provides up to $250 million of secured financing comprising a $110 million term loan and a revolving credit facility. At formation, the MEARF credit facility was seeded with seven office properties leased to internationally recognized firms in Silicon Valley, Orange County and San Diego, California and Austin, Texas.

Over the past several years, Menlo has turned to PNC Real Estate for multiple term loans and services including treasury management and capital markets. The existing relationship positioned PNC to execute on the syndication and proudly support Menlo’s growth trajectory.

In discussing the transaction, Menlo Chairman Henry D. Bullock stated, “We are grateful for the terrific support from our existing investor base during our initial capital raise. It’s a clear indication that the appetite for predictable cash yield from a low-leverage portfolio of well-located, high-quality office buildings is an attractive investment alternative, especially given the volatility in the public equity markets today.

“We’re excited about the Fund’s long-term growth prospects and are eager to continue its expansion,” Bullock added.

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Date: July 2016
Location: Palo Alto, California
Syndicated Loan Amount:
$250 million gross loan amount, $75 million PNC hold
Scope: Seven properties leased to internationally recognized firms in Silicon Valley, Orange County and San Diego, California and Austin, Texas

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