GSN Roundup: Big Auto Dealership Portfolios, Tesla Post-DOGE Issuance, and Duo Hotel Loan

Real Estate Alert – 9.16.2025 
Big Auto Dealership Portfolio Hits the Road 

A portfolio of 24 properties — 22 of which are auto dealerships — is up for grabs and expected to command bids of $500 million, setting the stage for one of the niche sector’s largest trades ever. 

Legacy Auto Capital, of Malvern, Pa., has tapped CBRE to market the properties as a package. Founded in 2020, Legacy Auto buys new-car dealerships via sale-leaseback transactions. 

The fully leased portfolio generates $27 million of net operating income. A purchase at the estimated value would give a buyer an initial annual yield of 5.4%. 

The properties are under absolute net leases with a weighted average remaining term of 16.5 years. The agreements include annual rent bumps. The two properties that aren’t dealerships are leased to Floor & Decor and McGovern Collision Center. 

The marketing campaign is touting the locations in “high barrier to entry markets” including the Austin, Boston, Houston, New York and Phoenix metropolitan areas. Dealerships are for Audi, Chevrolet, GMC, Honda, Hyundai, Kia, Land Rover, Lincoln, Mazda, Nissan, Subaru, Toyota and Volkswagen. 

A sale at the estimated value would mark the biggest trade of a U.S. auto dealership portfolio since at least 2020, according to Green Street’s Sales Comps Database. The current high-water mark for that timeframe was set in 2022 when Safford Automotive Group paid Brown Automotive Group 

$268 million for a 16-property package in a deal brokered by Cushman & Wakefield.  

Legacy Auto Capital Portfolio 

Brand/ Property/ City, State 

Honda/ 1150 South Gilbert Road/ Chandler, Ariz. 
Hyundai/ 8050 South Autoplex Loop/ Tempe, Ariz. 
Unidentified dealership/ / Orange County, Calif. 
Land Rover/ 90 & 1335 Boston Post Road/ Darien, Conn. 
Honda/ 145-163 Washington Street/ Auburn, Mass. 
Hyundai/ 240 Manley Street/ Brockton, Mass. 
Honda/ 407-409 Federal Street/ Greenfield, Mass. 
Hyundai/ 743 North Main Street/ Leominster, Mass. 
Floor & Decor/ 420 Boston Turnpike/ Shrewsbury, Mass. 
Collision Center/ 420 Boston Turnpike/ Shrewsbury, Mass. 
Chrysler Dodge Jeep Ram/ 1780-1784 U.S. Route 9/ Clifton Park, N.Y. 
Kia/ 250 North Route 303/ West Nyack, N.Y. 
Audi/ 2746 Bernville Road/ Leesport, Pa. 
Volkswagen/ 2746 Bernville Road/ Leesport, Pa. 
GMC/ 3000 North IH-35/ Austin 
Nissan/ 4914 & 4222 South Interstate 35, 1201 East St. Elmo Road/ Austin 
Chevrolet/ 18800, 18900 NW Freeway, 9110 North Eldridge Parkway / Houston 
Hyundai/ 24795 IH-35/ Kyle, Texas 
Volkswagen/ 2301 West Loop 340/ Waco, Texas 
Subaru/ 527 Bennington Street/ Bennington, Vt. 
Lincoln/Mazda/ 202 East North Foothills Drive/ Spokane, Wash. 
Honda/ 6100 North Green Bay Avenue/ Glendale, Wis. 
Subaru/Toyota/ 4120 North Frontage Road/ Sheboygan, Wis. 
Honda/ 4120 North Frontage Road/ Sheboygan, Wis. 

Asset Backed Alert – 9.19.2025 
Tesla Charges Up First Post-DOGE Issuance 

Tesla is coming back to the asset-backed bond market. 

The world’s second-largest electric-vehicle maker has started shopping its first auto-lease securitization since October 2024. The offering, estimated at $750 million, started making the rounds this week via bookrunners Citigroup, Credit Agricole, HSBC, Santander and Wells Fargo. It’s expected to price early next week. 

The company had put its securitization program on hold early this year as it navigated poor sales resulting in part from the economic strain of the Trump Administration’s tariff policies, as well as public backlash against chief executive Elon Musk over his political views and leadership of the U.S. Department of Government Efficiency. 

“Everybody is watching where this deal prices,” a banker said. “We all want to see if Musk’s time in the government impacts Tesla’s cost of funds.” 

Musk left DOGE on May 30. During his brief stint at its helm, he orchestrated layoffs at several government agencies, including the Consumer Financial Protection Bureau, the Education Department, the Social Security Administration and the U.S. Agency for International Development. 

Prior to Musk’s time at the White House, Tesla had been a routine issuer of bonds underpinned by auto leases. The company has priced $10 billion of such securities via 11 offerings since 2018. But it hadn’t completed a deal since last October, when it printed a $783 million transaction run by Citigroup, HSBC, Santander, Societe Generale and Wells Fargo. 

The hiatus in large part was driven by worries among Tesla treasury officials that bringing new deals amid a political backlash against Musk could result in higher securitization costs. With Musk’s return to private life, however, sources said those concerns have subsided. 

In the interim, Tesla has been funding its leases in part through commercial-paper conduits and warehouse lines. Meanwhile, in an attempt to boost sales, Tesla earlier this year reduced its prices and lease rates, though those moves have contributed to a decline in revenues. 

Commercial Mortgage Alert – 9.19.2025
Duo Nearing Finish Line on Huge Hotel Loan 

A joint venture between Blackstone and Starwood Capital has lined up $1.94 billion of floating-rate debt from six banks, led by JPMorgan Chase, to refinance 220 hotels in Florida, California and 31 other states. 

The partnership acquired the 24,560-room portfolio as part of its 2021 purchase of the Extended Stay America hotel chain and its affiliated REIT, ESH Hospitality. 

The interest-only mortgage, which hasn’t closed yet, would have an initial term of two years, plus three one-year extension options. JPMorgan and its co-lenders — Citigroup, Goldman Sachs, Wells Fargo, Deutsche Bank and Bank of America — intend to securitize the debt via a stand-alone offering expected to price next week (ESA 2025-ESH). 

The joint venture between New York-based Blackstone and Starwood, of Miami Beach, would use the proceeds to retire $1.90 billion of debt on the properties and cover an estimated $39 million of closing costs. 

The outstanding debt reaches final maturity next July. JPMorgan, Citi and Deutsche originated it four years ago as part of a $4.65 billion CMBS floater (ESA 2021-ESH) they provided to help finance the Blackstone-Starwood partnership’s $5.94 billion take-private acquisition of Extended Stay America and ESH. 

The existing CMBS loan originally was backed by 560 hotels. It has shrunk to $3.92 billion since then, as more than 100 of the underlying properties were sold or released from the collateral pool for other reasons. 

The collateral for the mortgage in the works was appraised recently at $2.96 billion, including a 19% premium the hotels presumably would command if sold as a package. That would put the loan-to-value ratio in the works at 65.4%. The aggregate value of the individual properties was pegged at $2.48 billion, which would lift the LTV to 78%. 

The projected debt yield tied to the pending loan would be 12.7%, and the anticipated debt-service coverage ratio would be 1.88 to 1 at issuance, based on an underwritten net cashflow of $244.8 million. The borrower has committed to purchase a 7.0% cap on the one-month SOFR rate, preventing the debt-coverage ratio from falling below 1.31 to 1. 

Thirty-one hotels in Florida, comprising 3,439 rooms, account for the largest share, or 16.1%, of the collateral pool’s underwritten net cashflow. Another 24 in California, spanning 2,836 rooms, represent 12.7% of the total. 

The portfolio also includes 16 hotels in Illinois (1,845 rooms, 6.1% of net cashflow), 14 in Maryland (1,534 rooms, 6.6%), 13 in New Jersey (1,554 rooms, 6.1%) and 12 each in Virginia (1,342 rooms, 5.9%) and Georgia (1,257 rooms, 3.9%). 

The properties continue to operate under Extended Stay America banners. They are 25 years old on average, with an average occupancy of 77.2% during the year that ended in July.