Workspace to repay loan debt via proceeds from common shares offering

By Sarah Lizee

Olympia, Wash., Oct. 16 – Workspace Property Trust’s operating partnership, Workspace Property Trust, LP, intends to repay outstanding amounts under its KeyBank loan agreement, its senior mortgage loan and three mezzanine loans using proceeds from an offering of common shares, according to a prospectus filed with the Securities and Exchange Commission.

The KeyBank loan agreement provides for revolving loans of up to $235 million and has a maturity date of Jan. 12, 2018, which may be extended for two terms of three months each. The agreement bears interest at an annual rate of Libor plus 130 basis points.

As of June 30, the senior mortgage loan had a principal balance of $557 million, the mezzanine A loan had a principal balance of $100 million, the mezzanine B loan had a principal balance of $109 million, and the mezzanine C loan had a principal balance of $50 million. The loans mature on Oct. 9, 2018 and may be extended for three terms of one year each. The weighted average interest rate as of June 30 was 5.91%.

Workspace said it also plans to use proceeds to pay $63.9 million in connection with the redemption of its mandatorily redeemable preferred equity.

Remaining proceeds may be used for general corporate purposes, including capital expenditures and potential future acquisitions.

Horsham, Pa.-based Workspace specializes in the ownership, management, leasing and development of office space throughout the United States.

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