Manulife US REIT secures six-month extension for asset disposal

Lenders also approved the sale of the Peachtree office building.

Manulife US Real Estate Investment Trust (MUST) has secured lender approval to extend its asset disposal deadline by six months, pushing it to 31 December 2025.

The extension allows more time to divest its Tranche 1 and/or Tranche 2 properties under its master restructuring agreement (MRA), which requires the trust to raise a minimum of $421.28m (US$328.7m) in net sale proceeds.

To date, with the sale of Capitol, Plaza, and the upcoming sale of Peachtree, MUST has achieved approximately 82% of the target, falling short by about $76.91m (US$60m).

The REIT will also use $32.05m (US$25m) in cash from its balance sheet, along with proceeds from the Peachtree transaction, to pay down debt due in 2026, 2027, and 2028. Manulife, the sponsor, will not seek repayment at this stage.

Lenders have approved the sale of the 28-storey Peachtree office tower in Atlanta for $171.44m (US$133.8m). Completion is expected by June 2025.

Assuming the sale and repayment are completed by 31 March 2025, MUST’s pro forma leverage will improve from 59.4% to 56.3%.

Interest costs are expected to drop from 4.37% to 3.94%, and debt maturity will extend from 2.7 to 3.1 years.

CEO John Casasante said the extension and support from lenders help MUST stay on track to reduce debt and stabilise the business amid a tough market.

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