GSN Roundup: Huge StorageMart Buy, Lone Star Hotel Loan, and Unfunded Capital Calls

Top stories in US CRE News this week:

Asset Backed ALert 01.23.26
Unfunded Capital Calls on Table as Collateral 

Banks in the U.S. and Europe are exploring new ways to securitize subscription credit lines they supply to private funds. 

Unlike recent transactions from Goldman Sachs and Investec, which were backed exclusively by the fully drawn portions of such credit lines, the deals now in development would potentially include undrawn pledges in their collateral pools. 

The efforts reflect the appeal of publicly distributed, rated securitizations as a mechanism for issuers to off-load risk and free up regulatory capital that they must reserve against the facilities, which the fund managers pledge to repay by drawing on the capital commitments of their own limited partners. 

Also known as capital-call lines, the facilities offer the general partners of private equity and private credit funds convenience and flexibility by reducing the number of times they have to call on pledges from their investors while also providing leveraged returns to the vehicles’ limited partners. 

Banking regulators recognize various ways of shedding exposure to such accounts, including sales through syndication to other banks and insurance companies; issuance of notes whose performance is linked to that of the accounts; and use of credit-default swaps. Unrated, bilateral cash securitizations also are an option. 

However, many banks, particularly in Europe, see a specific regulatory capital benefit to issuing publicly rated bonds. Additionally, many investors are more familiar with cash securitization structures than synthetic ones, with public ratings helping to widen the potential buy-side pool. 

Goldman Sachs issued the first such transaction in October 2024, followed by a second in July 2025. The senior notes from both transactions carried AAA ratings from Morningstar DBRS. Investec then completed a transaction on Jan. 8 in partnership with Ares Management, which manages the collateral pool on the bank’s behalf. The senior tranches are rated AAA by Fitch. 

Goldman’s deals were backed exclusively by existing drawn commitments to revolving subscription lines, while Investec’s was backed by term loans. But neither included undrawn pledges and therefore did not fully realize the potential capital relief.  

Including revolving subscription lines “is the holy grail,” said Greg Fayvilevich, global head of funds and asset management at Fitch. He said nearly every major bank is trying to tackle the issue. 

Why is including unfunded commitments in collateral pools problematic?  

The primary difficulty relates to the fact that a securitization facility that funds revolving debt must have a committed source of funding that mirrors the revolving nature of the subline facilities. Traditional unfunded commitment reserves would be a mismatch and would not be cost effective in this context. 

In addition, existing lenders need the consent of a borrower – the general partner of the private fund – to assign a subscription line of credit to a securitization trust. Borrowers tend to be more comfortable consenting to the assignment of funds they already have borrowed, as undrawn commitments introduce uncertainty around whether the new owner will be willing to fund future advances. 

Rating-agency criteria also can be problematic, and because yields on the accounts are modest, it can be difficult to structure deals appropriately without adding burdensome costs. 

That said, the inclusion of unfunded commitments could improve collateral yields and, with them, deal economics. While borrowers don’t pay interest on unfunded pledges, they do hand over commitment fees that serve as additional receivables.  

Unfunded commitments also could extend the weighted average life of a deal while slowing collateral amortization. That’s because paydowns of some lines could be offset by additional draws on other lines. 

As such, the expectation is that deal structures will continue to include reinvestment periods that allow for the acquisition of additional collateral, as was the case for the transactions from Goldman and Investec. 

Issuers also are likely to continue issuing multiple series of notes from the same master trust. Law firm Haynes Boone, for one, is working on a securitization facility that would allow the issuing entity to take on a share of a subscription-line provider’s revolving commitments in proportion with the share of funded commitments it assumes. 

Commercial Mortgage Alert 01.23.26
Lone Star Checks Into CMBS for Hotel Loan 

Lone Star Funds has turned to the CMBS groups at JPMorgan Chase and Goldman Sachs for $500 million of floating-rate debt to refinance six high-end hotels in Georgia, Texas, California and Virginia. 

Dallas-based Lone Star acquired the 2,049-room portfolio via two transactions in 2021 and 2022. The properties operate under Marriott International’s Westin Hotels & Resorts, Luxury Collection, Marriott and Sheraton flags. 

The CMBS loan, which closed on Dec. 9, has an initial term of two years, plus three single-year extension options. The lenders, led by JPMorgan, intend to securitize the interest-only debt via a single-borrower CMBS offering that’s slated to price next week (LSTR 2026-HTL6). 

Lone Star used $428.5 million of the new-loan proceeds to retire an outstanding CMBS mortgage on four of the underlying properties and balance-sheet debt on the other two. After covering an estimated $6.3 million of closings costs, it used the other $65.2 million to retire debt on one property in the previous CMBS deal (JPMCC 2021-HTL5) that wasn’t part of the collateral for the new loan. 

The collateral recently was appraised at $773.0 million, pegging the loan-to-value ratio at 64.7%. The projected debt yield would be 10.8%, and the anticipated debt-service coverage ratio would be 1.62 to 1 at issuance, based on underwritten net cashflow of $54.1 million. Lone Star has committed to purchase a 6.0% cap on the one-month SOFR benchmark, preventing the debt-service coverage ratio from falling below 1.20 to 1. 

The 507-room Whitley and the 368-room Westin Buckhead, both in Atlanta, account for $28.3 million, or 52.3%, of the pool’s underwritten net cashflow. The Texas properties, both in Frisco, are the 302-room Westin Dallas Stonebriar Golf Resort & Spa (17% of net cashflow) and the 168-room Sheraton Stonebriar Hotel (2.9%). 

The pool also includes the 368-room San Ramon Marriott in San Ramon, Calif., (14%) and the 336-room Westfields Marriott Washington Dulles, in Chantilly, Va. (13.8%). 

Real Estate Alert 01.27.26
StorageMart Buys Huge NY Storage Portfolio 

A partnership led by StorageMart has paid $1.03 billion for a massive self-storage portfolio in New York City, the largest deal in the niche sector in five years. 

The purchase encompasses 15 properties totaling 25,855 units. The roughly 1.3 million sq ft package is about 78% occupied. The seller was Washington-based investment manager Carlyle Group, which cobbled the portfolio together over time. 

Eastdil Secured brokered the sale, the largest self-storage trade since StorageMart paid $3.2 billion to buy 18 New York facilities from Edison Properties at yearend 2021. Eastdil also brokered that transaction. 

StorageMart’s partner is an unidentified sovereign wealth fund. The Columbia, Mo.-based operator is expected to rebrand the properties under its Manhattan Mini Storage flag. 

The portfolio’s economic occupancy, a measure that typically takes into account rent delinquencies and concessions, is just 46%. Marketing materials suggested that improved management, increased leasing and burned-off concessions could see a new owner triple its net operating income in four years. 

The portfolio encompasses 15,389 standard storage units, which are 88% occupied, and 10,456 lockers, with occupancy of 41%. Seven properties are in Brooklyn, four are in Queens, three are in Manhattan and one is on Staten Island. 

The average age of the facilities is four years, and in-place rent averages $35.60/sq ft. Unlike most commercial real estate sectors, self-storage properties are by definition built on a speculative basis and often take longer to lease up because of that. 

The sales campaign highlighted the demand for self-storage facilities within 3 miles of the properties, where there is an average population of nearly 862,000 with an average household income approaching $123,000. 

In addition, development headwinds are stiff. A recent report from Green Street, the parent of Real Estate Alert, noted that the city’s removal of a popular tax break in 2020 has stymied new construction. “Without [the tax break], which provided 200-400 bp of additional return, few projects are economically feasible given steep land costs,” the report said. 

StorageMart was founded in 1999 by Gordon Burnam. The private firm, which now has more than 300 sites across the U.S., Canada and the U.K., today is controlled by Los Angeles Rams owner Stan Kroenke, Cascade Investments and Singapore-based GIC, among others. 

Kroenke is the majority owner. GIC and Cascade bought a stake in the company in 2020, in part to help fund expansion. With this purchase, StorageMart’s assets under management total nearly $10 billion.