Background and Customer Goals

Who would finance a large new development in Mexico based on Spec buildings and land acquisitions to meet the new market conditions in Mexico. Only a company that knew its customer well and believed in the economic potential of the country.

In 2006 Mexico’s largest developer of industrial real estate, FINSA, was looking for financing to acquire land, construct several buildings on spec and build infrastructure for a large new industrial development. FINSA was well known, having been a customer since GE Capital Real Estate Mexico was established in 1994.

The GE Capital Real Estate Solution

GE Capital Real Estate Mexico provided a $77.5 million credit facility in two parts. The first was a $27.5 million line of credit for construction of spec buildings totaling 654,000 sq. ft. and the industrial park’s infrastructure (utilities, roads, sidewalks, and access for intermodal transportation).  The second was a $50 million line of credit to finance development of built-to-suits and for acquisitions. The structure of the credit facility was complicated: terms and rates varied depending on factors related to each project, such as the quality of the tenants. The loans carried a 25-year amortization schedule.

The transaction was also complex because we financed different stages of the project in one loan: land acquisition, park infrastructure and development of the spec buildings. To ensure the deal made economic sense, we conducted a rigorous analysis of the market size, trends and absorption rates. 

A Win-Win Relationship

Because FINSA was a long-time customer, we were well acquainted with their business and their strategy for growth. GE Capital Real Estate Mexico added value in structuring this transaction to the customer’s needs. We also worked to the time-line of the deal.  We were the only lender able to understand the project fully and execute on time. Today, FINSA has built, sold and leased the majority of the available space and is planning to develop Phase II of the industrial park. GE Capital Real Estate Mexico is still FINSA's major lender and the success of this deal resulted in a $100 million pipeline for the next 24 months.