$103m Cronheim note deal a catalyst for more?

Cronheim Mortgage leveraged its long-standing relationships to arrange a $103,511, 284 million note purchase.

And the success of the deal should lead to more and larger transactions, according to Dev Morris, principal of Cronheim.

Morris and Andrew Stewart completed the acquisition of a single loan collateralized by three single-tenant net leased properties occupied by NV Energy, FedEx and Cummins, Inc.

The loan was acquired in a pari-passu partnership by Cronheim's correspondent investors, including American National, National Western Life Insurance Company and The Westcap Corporation (of Delaware), for which Cronheim will act as servicer.

The seller was KeyBank National Association, who originated the debt in 2007 for affiliated entities of Lexington Realty Trust as borrower.

The three properties total 1.2 million square feet.

NV Energy, the result of a 1999 merger between Nevada Power, Sierra Pacific Power, and Sierra Pacific Resources, has provided electricity to customers in northern Nevada and northeastern California for over 150 years.

The 282,000 s/f property has served as Nevada Power's (and now NV Energy's) corporate headquarters since it was constructed in 1983.

FedEx was founded in Memphis in 1973, occupying a 210-acre campus adjacent to the Memphis International Airport in addition to its corporate headquarters and other office buildings in the Memphis area.

The collateral consists of 521,286 s/f in four buildings located immediately west of the airport, which FedEx has occupied since they were built in the early 1980's.

The facility houses FedEx's flight simulation and pilot training center, logistics, invoicing and main computer operations. FedEx is Memphis's largest employer, with over 30,000 local employees.

Cummins, Inc., a global leader in the design, manufacture, distribution, and servicing of diesel and natural gas engines, as well as electric power generation systems, employs over 33,000 people in 160 countries. The company was founded in 1919 and has always been headquartered at this location.

The subject property totals 390,100 s/f, of which 360,000 were built in 1983.

Cronheim conceived of the idea to assemble the loan purchase as a participation given its long-standing relationship with all of the buyers, according to Morris.

As a result, he said, the firm was able to achieve an expeditious completion to a complex transaction.

"We expect to utilize this group to finance additional projects in an environment where larger transactions are difficult to accomplish," added Morris.

Several of Cronheim's key executives are also in the process of creating a fund vehicle to supply capital for additional loan purchases as well as new originations.