Developers Diversified Realty Corp. originated a $31.7 million mezzanine loan to a subsidiary of EDT Retail Trust secured by equity interests in six prime shopping center assets owned by EDT and managed and leased by DDR.
The mezzanine loan was funded in conjunction with the origination of a new $142.3 million senior loan secured by first mortgages on these EDT properties. DDR will continue to lease and manage the assets on behalf of EDT pursuant to the existing management and leasing agreement.
The seven-year mezzanine loan is co-terminus with the senior loan and has a fixed interest rate of 10 percent. The aggregate loan to value ratio for the senior and mezzanine loans is approximately 75 percent. DDR fully funded the mezzanine loan with the proceeds from the recent sale of approximately 2.8 million shares of DDR common stock.
"We are pleased to make this conservatively underwritten loan that we believe provides an attractive risk-adjusted return on prime assets that we have managed for years,” DDR CFO David Oakes said in a statement. “Simultaneously funding this investment with new equity is consistent with our stated strategic goals and is beneficial to our covenants and funds from operations per share."
Cole Real Estate Invests $132M on Two Properties
Cole Real Estate Investments announced two acquisitions—one in California and the other in Missouri—spending a combined $132 million for a pair of shopping centers.
In the first, Cole acquired the 686,241-square-foot Whittwood Town Center in Whittier, Calif. for $83.5 million from Morgan Stanley in an all-cash deal.
“The center has nationally recognized, high-credit quality tenants, recent strong leasing momentum, high occupancy and a stable cash flow, exactly the type of asset we are targeting for acquisition in our expanding portfolio,” Cole Chief Acquisitions Officer Kim Kundrak said in a statement. “Additionally, Whittwood Town Center is the dominant retail destination within the trade area and benefits from a built-out market, limiting future competitive retail development.”
The community shopping center is 97 percent leased and was completely redeveloped from 2004 to 2006. Tenants include Target, Sears and JC Penney, all on long-term ground leases, as well as other credit tenants, including Vons (Safeway), Kohl’s, PetSmart and CVS.
The Cushman & Wakefield broker representing the seller in this transaction was Marc Renard, executive managing director. Representing Cole was Scott Holmes, vice president of acquisitions.
In the second deal, Cole Real Estate Investments acquired a major portion of Manchester Highlands, a multi-tenant shopping center located in Manchester, Mo., from Pace Properties for $48.5 million in in an all-cash transaction.
The portion acquired by Cole is 98 percent leased, and includes 29 acres occupied by a 204,000-square-foot Wal-Mart Supercenter, plus the adjoining retail space totaling 135,000 square feet with junior anchor tenants including Best Buy, Bed Bath & Beyond and PetSmart.
Ben Wineman, senior vice president of Mid-America Real Estate Corp., represented the seller. Holmes represented Cole.
Grubb & EllisSale of Four Inland Empire Centers
The Grubb & Ellis Co. team of Michelle Schierberl, CCIM, senior vice president, institutional capital markets, and Donald Ellis, associate, investment group, have sold four Riverside County properties for approximately $40 million in recent months.
“New buyers are in the market aggressively pursuing centers that meet their criteria,” said Schierberl, “Challenging assets with new, quality construction, in good locations are becoming available to buyers below replacement cost in limited supply.
Recent sales by the Schierberl/Ellis team include the 56,473-square-foot San Jacinto Esplanade, the 68.749-square-foot Temecula Creek Plaza, the 74,208-square-foot Moreno Beach Plaza, Phase II and the 94,574-square-foot Moreno Marketplace. All of these centers except Temecula Creek Plaza have entitled land enabling the buyer to increase the size of the retail in the future.
Cedar Purchases N.J. Center for $26.5M
Cedar Shopping Centers Inc. entered into a definitive agreement to purchase the 148,000-square-foot Cross Keys Place shopping center in Sewell, N.J. on behalf of the joint venture between Cedar (20 percent) and RioCan Real Estate Investment Trust (80 percent) for approximately $26.5 million, exclusive of closing costs and adjustments.
Cross Keys Place, completed in 2007, is100 percent leased, and anchored by a 42,000-square-foot Sports Authority, a 35,000-square-foot Bed, Bath & Beyond, a 21,000-square-foot AC Moore, a 19,000-square-foot Old Navy and a 16,000-square-foot Petco. Leases for the five anchor tenants extend from 2018 through 2023, exclusive of extension options. The property is shadow-anchored by a 118,000-square-foot Home Depot.
The property is being acquired at an ingoing yield in excess of 8 percent. Cedar's share of the purchase price, estimated at approximately $5.2 million, will be funded from the company's credit facility for stabilized properties on which draws presently outstanding amount to approximately $6 million.
The joint venture, which completed two acquisitions totaling $72 million earlier this year, and which recently announced purchase contracts for seven properties totaling approximately $200 million, expects to place fixed-rate financing on the shopping center shortly after closing. The terms of such financing are presently estimated at an interest rate of 5.5 percent for a term of 10 years in an amount equal to approximately 55 percent ($14.85 million) of the purchase price.
Cedar will provide property and financial management, leasing and construction management services for the property and will also receive certain acquisition, reporting and financing fees.
HFF Closes $19.34M Sale in Jacksonville Beach
The Miami office of Holliday Fenoglio Fowler L.P. (HFF) closed the sale of the 151,660-square-foot Pablo Plaza community center in Jacksonville Beach, Fla.
HFF managing director Brad Peterson marketed the property on behalf of the seller, Phillips Edison & Co.. Equity One Inc. purchased Pablo Plaza for $19.34 million and assumed an existing CMBS loan.
Renovated in 2008, the property is 93 percent leased to tenants including HomeGoods, Marshalls, Office Depot and Panera Bread.
JLL Secures $18.5M Refinancing for South Carolina Center
Jones Lang LaSalle (JLL) secured $18.5 million in refinancing capital for Centro Properties Group’s 384,306-square-foot Hillcrest Shopping Center in Spartanburg, S.C.
JLL’s real estate investment banking practice secured a five-year, fixed-rate from lender Quadrant Real Estate Advisors.
Leading the Jones Lang LaSalle team on these transactions were Vice President Dustin Stolly, Managing Director Jere´ Lucey and Analyst Bryan Jonas.
The property is anchored by a Publix super market and is currently 76 percent leased.
Inland Purchases of Kohl’s-Occupied Building for $17M
Inland Real Estate Acquisitions Inc. purchased a 69,000-square-foot freestanding retail building in Bend, Ore., occupied by Kohl’s Department Stores Inc. for $17 million.
The property was purchased on behalf of Inland Diversified Real Estate Trust Inc.. Kohl’s occupies the property on a net lease that extends through 2030, with multiple renewal options. The purchase was facilitated by Mark Cosenza, vice president of Inland Real Estate Acquisitions.
The newly-built retail building is located within Bend River Promenade, a recently-redeveloped shopping center with tenants that include Macy’s, Sears and T.J. Maxx. Not including the Kohl’s building, River Bend Promenade totals approximately 252,000 square feet.
Hull Storey Gibson Acquires Macon Mall
Hull Storey Gibson Cos. has acquired the 1,445,000-square-foot Macon Mall in Macon, Ga., for an undisclosed price.
Anchored by Belk, JCPenney, Macy’s and Sears, Macon Mall opened in 1975 and was expanded in 1997.
Coyote Management and Garrison Investment Acquire Six Centers
Coyote Management L.P. and Garrison Investment Group, through their affiliates have acquired six properties.
The firms bought the 517,153-square-foot Lakeshore Mall in Gainesville, Ga., the 576,000-square-foot Decatur Mall in Decatur, Ala., the Promenade Montgomery Shopping Center, Promenade Montgomery North Shopping Center and Bellwood CenterQuaker Village in Greensboro, N.C.
“These acquisitions represent the next phase of our company’s strategic growth initiatives,” Coyote’s CEO and Chairman Michael E. Rulli said in astatement. “We fully expect Coyote’s ownership of these kinds of assets to increase dramatically in the next two years.”
Other Notable Deals
USAA Real Estate Co.’s US Republic Core Fund announces the purchased the 74,403-square-foot Village Shoppes at Windermere in Forsyth County, Ga., from Columbia Windermere VI LLC an entity of Marietta-based commercial retail development firm Columbia Properties. The purchase price was not disclosed. Columbia will retain property management duties.
USAA also formed Admiral Capital Real Estate Fund with the Admiral Capital Group, a company run by NBA Hall of Famer, philanthropist and 1987 U.S Naval Academy graduate David Robinson. The partnership will pursue commercial real estate opportunities nationally.
KLNB Retail Sales brokered the sale of the 84,000-square-foot Airport Plaza Shopping Center in Allentown, Pa. A joint venture between MCB Real Estate and the Hampshire Cos. acquired the center from the Rosen Group Inc. for an undisclosed price. Gil Neuman of KLNB Retail Sales and Special Assets represented the seller in this transaction while the purchaser was self-represented.