iStar Sells $1.35bn Commercial Property Portfolio, Gains $205m
iStar Financial (SFI) completed the sale of 32 real properties, or interests therein, to various subsidiaries of investment firm Dividend Capital Total Realty Trust. iStar, a finance company specializing in the commercial real estate industry, said it expects to gain approximately $250m from the sale. The aggregate purchase price for the portfolio was approximately $1.35bn before closing costs. iStar provided Dividend Capital with $106m in mezzanine loans as part of its financing for the transaction. The mezzanine loans bear an initial 8.8% interest rate and have effective maturities of three and five years. iStar plans to use the proceeds from this transaction to repay a $925m loan secured by the properties being sold, as well as for general corporate purposes. Dividend Capital signed the agreement on the sale in May. The properties are primarily leased, with large corporate tenant subject to triple net leases, according to a statement on the transaction. The deal was expected at the time to close next quarter. Write to Diana Golobay. Disclosure: the author holds no relevant investments.