Pacific Oak Closes $80 Million Loan
The financing package includes structured repayments linked to phased land sales and frees up working capital.
August 05, 2025
Capital Strategy Realigned
Pacific Oak Strategic Opportunity REIT, Inc. is repositioning its capital structure with a new $80 million credit facility. Finalized on July 29, 2025, the loan supports both debt repayment and day-to-day liquidity, with terms tied directly to asset sales and future cash flow events.
The financing comes through several wholly owned subsidiaries and is backed by three key real estate holdings: Park Highlands land , Richardson lands , and 210 West 31st Street. Whitehawk Capital Partners LP serves as administrative and collateral agent on the deal.
Roughly $44.8 million from the loan goes to fully retire Pacific Oak’s Series C bonds. With this payment, the company clears all obligations under the bond series and initiates a delisting from the Tel Aviv Stock Exchange. The remaining funds are earmarked for several short-term needs:
- Interest reserve account
- Bond servicing for Series B and D
- Repayment of a short-term bridge loan
- Deferred fees and transaction-related costs
Loan Terms and Repayment Structure
The loan structure is designed for flexibility. It carries a floating rate of SOFR plus 6.5% (with a 3.5% SOFR floor) and requires monthly interest-only payments. Maturity is tied to the company’s progress on selling the Park Highlands land. If the third phase of the sale closes ahead of schedule, the loan ends early. If not, the final maturity date extends to March 1, 2028—assuming no defaults.
Two key repayments are already built in:
- $45 million due after the second Park Highlands phase closes (targeted for December 2026)
- $35 million due at the close of the third phase
The agreement allows for early repayment—with a 4% exit fee—and requires mandatory prepayment in the event of property sales or refinancing activity involving the pledged assets.
Collateral and Guarantees
All three properties are cross-collateralized. A default on any single borrower or property may trigger enforcement across all collateral. The agreement also includes standard limitations on new debt, asset transfers, and changes in control.
Two affiliated entities— Pacific Oak SOR Properties, LLC and Pacific Oak SOR US Properties II, LLC —guarantee the loan. These guarantees remain full recourse until the Series B and D bonds are extended beyond the second Park Highlands closing. If that happens, the guarantees narrow to cover only specific events like misuse of funds or willful misconduct. The guarantors also fund an interest cushion account to support ongoing payments.
With the new facility in place, Pacific Oak has cleared one of its more expensive debt obligations and added flexibility. The structure links financing directly to disposition milestones—giving the company added control over capital deployment as it executes its long-term plan.
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