New Balance

Case Study

Financing the world headquarters for New Balance

New Balance has shaped Boston for decades. Learn more about why they chose to work with our credit tenant lease team to finance their new LEED-certified headquarters.

At a Glance

Identifying the most effective capital structure

Our credit tenant lease team provided New Balance the ability to finance the construction of its new global headquarters in Boston Landing. Learn more in our partner story below.

Relationship since 2013

Transaction details:

Construction-to-Permanent Financing

“In financing the world headquarters for New Balance, we were able to take advantage of a credit tenant facility that allowed us to maximize proceeds for this project, while being able to utilize other capital resources to finance the remaining projects at Boston Landing.”

Jim Halliday, Managing Director, NB Development Group

<p>“In financing the world headquarters for New Balance, we were able to take advantage of a credit tenant facility that allowed us to maximize proceeds for this project, while being able to utilize other capital resources to finance the remaining projects at Boston Landing.”</p>

The Full Story

Providing a Customized Solution

New Balance was looking to finance the construction of its new global headquarters building in Boston Landing. In order to facilitate the project, the Company originally was looking at a commercial real estate solution and didn’t realize that given it was a private company, it could look to us for other sources of capital.

We were able to work with the company to meet their financing goals by sizing the transaction to match their construction budget, as well as provide a customized solution in which they could pay a rental rate that they were looking to achieve.

“As a direct lender, we can move quickly to a rate-lock and work with the sponsor and the developer, as well as the tenant, in situations where there may be changes to the underlying project scope.”

Elyssa McMullen, Managing Director, PGIM

<p>“As a direct lender, we can move quickly to a rate-lock and work with the sponsor and the developer, as well as the tenant, in situations where there may be changes to the underlying project scope.”</p>

Keeping New Balance in the Boston Community

A credit tenant lease transaction is a hybrid between a corporate finance transaction and a real estate solution, in which a borrower would finance a project on a long-term basis and pledge to us a mortgage of the building and an assignment of the underlying lease. Under a credit tenant lease financing, the borrower gets to monetize the rental stream due under a longer lease, and execute the transaction based on the credit quality of the underlying tenant rather than the value of the property.

As a result of our partnership, we walked New Balance through the whole process, had very efficient due diligence, and provided the maximum proceeds. New Balance has been in this Boston Landing area for 40+ years and we are proud to support their relationship with the surrounding community.