Blackstone, GIC, and LBA Realty have secured a $950 million CMBS refinance for an industrial portfolio, anchored by San Jose’s 880 Industrial Center, despite a Kroll Bond Rating Agency assessment yielding an in-trust loan-to-value of 114.6%.

Blackstone, in a joint venture with Singapore's sovereign wealth fund GIC and LBA Realty, has finalized a $950 million Commercial Mortgage-Backed Security (CMBS) refinancing package for a portfolio of industrial properties, with San Jose's 880 Industrial Center serving as the single largest asset by appraised value in the pool. The deal, known as LBA 2026-LBA6, comes with a notable assessment from Kroll Bond Rating Agency (KBRA), which valued the portfolio significantly lower than the appraiser's figure, resulting in a high loan-to-value ratio.

The debt package is structured as a floating-rate, interest-only loan with an initial two-year term and options for three one-year extensions. Wells Fargo and J.P. Morgan acted as co-originating lenders. According to KBRA's pre-sale report, the portfolio encompasses 41 properties, totaling 8.3 million square feet, and was 84.8% leased as of June 2026. However, KBRA's analysis yielded a net cash flow of approximately $60.2 million and valued the entire portfolio at $829.3 million — 42.4% below the appraiser's aggregate as-is value. This disparity places the in-trust KBRA Loan to Value (KLTV) at 114.6%, indicating the loan substantially exceeds KBRA's own collateral valuation.

The 880 Industrial Center, located at 1605 Industrial Avenue in San Jose, was developed by LBA Realty and stands out as the most valuable individual property underpinning the refinancing. Local industrial market conditions show a Silicon Valley warehouse vacancy rate of 8.0% in Q1 2026, with overall San Jose industrial vacancy at 8.4% and average asking rents around $26.21 per square foot, according to Matthews Real Estate Investment Services. This refinancing, heavily reliant on a floating-rate, interest-only structure, reflects Blackstone's strategy in a volatile commercial real estate market, especially as demand for industrial space shows signs of moderating.

While the refinancing is confirmed by the KBRA pre-sale report and reported by multiple outlets, specific property-level details for the 880 Industrial Center, such as its exact square footage or primary tenants, remain undisclosed in public filings. The significant gap between the appraiser's valuation and KBRA's independent assessment of the collateral will be a key metric for investors in the securitized notes, particularly given the short initial term and interest-only nature of the loan.