On May 28, a joint venture between Hines and MetLife Investment Management closed a $43.8 million first mortgage loan on two Class A industrial buildings in Martinsburg, West Virginia. Mesa West Capital provided the five-year financing.
The properties, delivered in early 2023, total 730,800 square feet on a 69.8-acre site at 4903 and 5115 Winchester Avenue. Each building is 365,400 square feet with 40-foot clear heights, 90 dock doors, 136 trailer spaces, and at least 4,000 amps of power.
One building is fully leased to Treplar Inc., a packaging manufacturer. The other sits vacant. The two buildings represent Phase I of Tabler Station Logistics Park, a planned 1.6 million-square-foot bulk distribution development.
The loan proceeds refinance existing debt on the completed phase. Mesa West, a Los Angeles-based commercial real estate debt fund, structured the loan at a reported 60% loan-to-cost, per market sources. The five-year term aligns with typical bridge-to-stabilization timelines.
Industrial lending has tightened materially since mid-2022. Trepp data shows industrial CMBS delinquency rates rose from 0.3% in Q1 2023 to 1.1% in Q1 2026. Lenders now favor properties with demonstrated leasing traction or strong sponsorship.
Hines and MetLife bring both. Hines, with $93 billion in assets under management, has a track record of executing large-scale logistics developments. MetLife Investment Management, the insurer's asset management arm, allocates significant capital to stabilized industrial assets.
The vacancy at one building is the deal's most telling detail. Mesa West is financing a partially leased asset in a secondary market. That signals confidence in the property's location—immediate access to Interstate 81, connecting to Baltimore, New York City, and Philadelphia—and in the sponsors' ability to backfill the remaining space.
Martinsburg sits in the Eastern Panhandle of West Virginia, roughly 90 miles from Washington, D.C. The market has attracted industrial developers seeking lower land costs and proximity to Mid-Atlantic population centers. CBRE's Q1 2026 industrial report pegs the region's vacancy rate at 6.2%, below the national average of 7.8%.
The $43.8 million loan equates to roughly $60 per square foot on the total square footage. That is below replacement cost for modern industrial product in primary markets, where construction costs often exceed $150 per square foot. In secondary markets like Martinsburg, replacement cost runs $80–$100 per square foot, per Rider Levett Bucknall data.
Mesa West's willingness to lend at a discount to replacement cost reflects a broader shift in industrial debt markets. Lenders are no longer underwriting to peak rents and aggressive lease-up assumptions. They are pricing for reality: higher interest rates, slower absorption, and longer lease-up periods.
The five-year term gives the sponsors time to stabilize the vacant building. If leasing accelerates, the JV can refinance into longer-term, lower-cost debt. If the market softens further, Mesa West holds a first mortgage at a conservative basis.
This deal is a template for how industrial refinancing will work in 2026. Sponsors with deep balance sheets and institutional-grade assets can access debt capital. Lenders will provide it—at conservative leverage, on assets with clear demand drivers, and with a path to stabilization.
The Hines-MetLife JV got its $44 million. Mesa West got a loan secured by modern logistics product in a supply-constrained corridor. The vacant building is the variable. If it leases within 18 months, this deal looks prescient. If not, the five-year term gives everyone time to adjust.