Seven Hills Realty Trust Closes $23.8 Million Mortgage Loan to Recapitalize a Self-Storage Property in Los Angeles
Seven Hills Realty Trust (Nasdaq: SEVN) has closed a $23.8 million first mortgage floating rate loan to recapitalize a newly constructed, 80,000 square foot self-storage facility at 2515 S Broadway, Los Angeles, CA. The Extra Space Storage branded property is situated near the University of Southern California's main campus. The loan has a three-year initial term with two one-year extension options, subject to meeting certain requirements. SEVN’s manager, Tremont Realty Capital, facilitated the transaction through JLL, advising Staley Point Capital. Tom Lorenzini, SEVN's President and Chief Investment Officer, emphasized that this loan expands SEVN’s portfolio into the self-storage sector in a supply-constrained market, aiming to generate attractive, risk-adjusted returns for shareholders.
- Closed a $23.8 million loan for a newly constructed self-storage facility.
- Diversified portfolio into the self-storage sector.
- Located in a supply-constrained market near the University of Southern California.
- Loan structure includes a three-year term with two one-year extension options.
- None.
Insights
From a financial perspective, the closure of a
The geographical location, near USC's main campus, adds intrinsic value to the property due to the high demand for self-storage in highly populated urban areas with limited supply. This could result in stable income generation, aligning with SEVN’s goal to produce risk-adjusted returns. Retail investors should note that while this diversification could offer stability, the floating rate aspect remains a variable factor that needs monitoring in conjunction with prevailing economic conditions.
The entry into the self-storage market by SEVN is strategic. Self-storage has been a resilient sector, even during economic downturns, due to consistent demand driven by life events and housing market dynamics. The branding of the facility under Extra Space Storage, a recognized name in the self-storage industry, enhances its marketability and potential to attract customers.
Los Angeles is a prime market, particularly near educational institutions like USC, which can ensure continuous demand from students, residents and local businesses. However, retail investors should be cognizant of market saturation risks and competitive pressures in the self-storage sector. The partnership with JLL and Tremont Realty Capital showcases industry confidence, but continuous market analysis is essential for assessing long-term success.
The loan has a three-year initial term with two one-year extension options, subject to the borrower meeting certain requirements. SEVN’s manager, Tremont Realty Capital, was introduced to the transaction by JLL, which advised Staley Point Capital, the
Tom Lorenzini, President and Chief Investment Officer of SEVN, made the following statement:
“The closing of the 2515 S Broadway loan further grows our portfolio and diversifies it into the self-storage sector. This Class A self-storage property is in a supply constrained market near the University of Southern California’s main campus. With ample liquidity for investment and a strong pipeline, we continue to focus on attractive opportunities for originating new loans and generating attractive, risk adjusted returns for our shareholders.”
About Seven Hills Realty Trust
Seven Hills Realty Trust (Nasdaq: SEVN) is a real estate investment trust, or REIT, that originates and invests in first mortgage loans secured by middle market and transitional commercial real estate. SEVN is managed by Tremont Realty Capital, an affiliate of The RMR Group (Nasdaq: RMR), a leading
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These statements may include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “will,” “may” and negatives or derivatives of these or similar expressions. These forward-looking statements include, among others, statements about SEVN’s investment focus and ability to complete additional loan investments in the future. Forward-looking statements reflect SEVN’s current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause SEVN’s actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Some of the risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, but are not limited to, the following: the ability of SEVN to make additional investments; the success of SEVN’s investments; SEVN’s available liquidity, access to capital and cost of capital; and various other matters. These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in SEVN’s periodic filings with the Securities and Exchange Commission, or SEC. The information contained in SEVN’s filings with the SEC, including under the caption “Risk Factors” in its periodic reports, or incorporated therein, identifies important factors that could cause SEVN’s actual results to differ materially from those stated in or implied by SEVN’s forward-looking statements. SEVN’s filings with the SEC are available on the SEC’s website at www.sec.gov. You should not place undue reliance upon forward-looking statements. Except as required by law, SEVN does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240626980038/en/
Stephen Colbert, Director, Investor Relations
(617) 231-3223
www.sevnreit.com
Source: Seven Hills Realty Trust
FAQ
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