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Case Study

Centerspace refinances bank debt

Centerspace is an owner and operator of apartment communities. Founded in 1970, Centerspace currently owns 79 apartment communities consisting of 14,275 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota and South Dakota.

Case Study

Centerspace refinances bank debt

Centerspace is an owner and operator of apartment communities. Founded in 1970, Centerspace currently owns 79 apartment communities consisting of 14,275 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota and South Dakota.

At a Glance

Refinancing bank debt through a PPC-led club transaction

In mid-2021, Centerspace began considering a refinance of bank debt to take advantage of attractive long-term rates. Given concern over a near-term increase in rates, timing and speed were critical for the Company. Our speed and certainty of execution, flexibility of structure, and ability to work with a small investor group solidified Centerspace’s decision to partner with us. 

Relationship since 2019
Transaction details:
  • Senior Unsecured Notes
  • PPC-Led Club Transaction
“We are happy to partner again with Prudential and expand our access to the private placement market.  This transaction allows us to further strengthen our balance sheet by extending our debt maturity schedule and reducing our cost of capital.”
Mark Decker President and CEO, Centerspace

The Full Story

Refinancing bank debt

Centerspace is an owner and operator of apartment communities.  Founded in 1970, Centerspace currently owns 79 apartment communities consisting of 14,275 homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota and South Dakota.  

Historically, Centerspace primarily utilized mortgage debt for its financing needs.  In 2017, the Company announced a shift towards an unsecured financing strategy, which was further developed in 2019 when the Company drew $125 million of senior unsecured notes under a newly-established $150 million Pru-Shelf facility. In January 2021, the Pru-Shelf was upsized to $225 million and the Company drew $50 million of senior unsecured notes to support portfolio growth and refinancings of secured debt. 

In mid-2021, Centerspace began considering a refinance of bank debt to take advantage of attractive long-term rates. The Company was evaluating a few different financing options, including a PPC-led club transaction. Given concern over a near-term increase in rates, timing and speed were critical for the Company. Our speed and certainty of execution, flexibility of structure, and ability to work with a small investor group solidified Centerspace’s decision to partner with us. 

In September 2021, we closed on $25 million of senior unsecured notes as part of a $125 million PPC-led club transaction. We are pleased to have been a part of this process and look forward to supporting Centerspace’s continued growth.

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Alex Stuart
Senior Vice President
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Minnesota, Nebraska & North Dakota

Perspectives

More than meets the eye: A closer look at the most commonly used type of capital.
The Prudential Private Capital Guide to Senior Debt.
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