Developers Diversified Realty Corp. has underwritten a public offering to sell $300 million in convertible senior notes due 2040. DDR intends to grant the initial purchasers a 30-day option to purchase up to an additional $45 million aggregate principal amount of such notes to cover over-allotments, if any.
The firm expects to use the net proceeds from the offering to reduce balances on its corporate revolving credit facilities and for general corporate purposes.
J.P. Morgan Securities LLC, Goldman, Sachs & Co., Deutsche Bank Securities Inc. and UBS Securities LLC are serving as joint book-running managers.
HFF Arranges Refinancing for Retail Condos, Mixed-Use Property
The New York office of Holliday Fenoglio Fowler L.P.. (HFF) arranged a $44 million refinancing for a retail condominium in Manhattan while the firm’s Boston office arranged a $12.5 million refinancing for a Boston mixed-use property.
In the first, HFF managing director Evan Pariser and senior real estate analyst Todd Newman worked exclusively on behalf borrower ABC Management Corp. to secure a 10-year, fixed-rate loan with Prima Capital Advisors for a retail condo at 599 Broadway in Manhattan’s SoHo neighborhood.
The retail condominium includes the first three floors and lower level retail space of the 12-story property. An entity controlled by Jeff Sutton is the master tenant for the retail condominium and American Eagle subleases the ground, second floor and lower level spaces through a 15-year lease. American Eagle is scheduled to open this flagship SoHo store in November 2010.
In the second deal, HFF senior managing director Bob Herron and senior real estate analyst Carlos Febres-Mazzei worked on behalf borrower ELV Associates Inc. to secure a fixed-rate loan through Peoples United Bank for 66 Long Wharf, a 77,655-square-foot office and retail property along the waterfront in Boston’s Financial District.
The property is 97.5 percent leased, of which 73 percent of the space is under long-term leases. Tenants include the Chart House restaurant, which has operated at the property since 1973, and engineering/construction giant AECOM.
A&B Properties Buys Utah Center
A&B Properties Inc., the real estate subsidiary of Alexander & Baldwin Inc. acquired the 146,600-square-foot Little Cottonwood Center in Sandy, Utah, for $20.5 million.
Little Cottonwood Center is a grocery-anchored shopping center with strong national and regional tenants, located in a suburban community of Salt Lake City. The center was acquired using 1031 tax-deferred proceeds from recent sales.
The shopping center is 97 percent occupied and its tenants include Fresh Market, McDonald’s, Starbucks, Discount Tires and Texaco. The purchase price included the assumption of a $6.4 million mortgage, at a 5.5 percent interest rate.
Wells Fargo Provides $12.1M Loan
Wells Fargo & Co. funded a $12.1 million three-year floating rate loan for the acquisition of Franklin Square Shopping Center, a 203,318 square foot community shopping center located in Frankfort, Ky. This loan was originated by Scott Bois of Wells Fargo’s New York Real Estate Capital Markets office.
The retail center is anchored by Kroger, JC Penney, Office Depot, Rite Aid and Hibbett Sporting Goods. The inline portion of the center includes nationally recognized retailers such as Pier 1 Imports, Starbucks, The UPS Store, Radio Shack, Kay Jewelers, Merle Norman and regional retailers including Cato and Chakeres Movie Theaters.
Cedar Closes $10.6M Financing
Cedar Shopping Centers Inc. completed a fixed-rate long-term financing on Swede Square, a 98,000-square-foot shopping center in East Norriton, Pa. It is anchored by an L.A. Fitness facility, Panera Bread, a Wells Fargo bank and a Goodyear Tire & Rubber Co. store.
The loan, in the amount of $10.6 million (representing approximately 75 percent of appraised value), was placed with Citigroup Global Markets Inc. and has a 10-year term with interest at 5.48 percent and amortization on a 30-year schedule.
Morgan Real EstateTwo Deals
Morgan Real Estate Inc., a Florida based real estate broker, arranged two recent sales.
In the first deal, Morgan represented Bayville Triess LLC in the purchase of a freestanding Walgreens drugstore in Bayville, N.J. Morgan’s George Morgan Jr. and Greg Woulfe represented Bayville. The undisclosed sale price was based on a cap rate of 7.37 percent. Morgan Real Estate and Marabella Commercial Finance assisted in obtaining for the purchaser a $4.6M CMBS non-recourse loan.
In a separate deal, Morgan helped arrange the sale of a ground lease for a newly constructed freestanding JP Morgan Chase bank in Miami, Fla.
Morgan and Woulfe represented AZ Biscayne Holdings LLC on the purchase. The undisclosed sales price was based on a cap rate of 6.5 percent. Financing was provided by Wells Fargo.
Other Notable Deals
Faris Lee Investments completed the $6.75 million sale of the 38,060-square-foot Magnolia Village Plaza retail center in Riverside, Calif. The property includes a newly renovated freestanding Taco Bell and in-line shops anchored by Kaiser Permanente. Nick Coo, director with Faris Lee Investments represented the seller, B U Management. The buyer was Newell Owenby Trust and was represented by Reza Kassrian of Pars Global. The property closed at a 7.1 percent cap rate.
Cohen Financial has secured a $3 million refinancing for a 41,514-square-foot PetSmart in Vista, Calif. The PetSmart consists of 41,514 square-feet of retail space and is located at 1740 University Drive. Brandon Harrington and André R. Bailey, both vice presidents in Cohen Financial’s Phoenix office, originated the transaction. They secured a non-recourse, fixed-rate loan with a 20-year amortization. The lender is a life insurance company. The borrower is Vista P.S. LLC.
Hanley Investment Group Real Estate Advisors’ William B. Asher represented the buyer in the purchase of a free-standing 11,460-square-foot commercial building in Mission Viejo, Calif., for a $2.9 million. The property was built in 1991 and was vacant at the time of sale. The buyer was Fairhaven Memorial. The seller, King’s Knight Ventures LLC, was represented by Marcus & Millichap Real Estate Investment Services.