Donahue Schriber successfully completed the final piece of a $1.2 billion balance sheet recapitalization.
The recapitalization occurred through several transactions. The final piece was a $365 million refinance with a bank syndicate led by Bank of America and also included Wells Fargo Bank, U.S. Bank, PNC Bank, Union Bank and City National Bank.
The loan refinances a portfolio of 31 of Donahue Schriber Realty Group’s assets encompassing grocery-anchored and power centers across California, Arizona, Oregon and Nevada. The new financing has a term of five years with a built-in option for a two-year extension, a lower interest rate and eliminates many restrictive covenants. Utilizing assistance from Chatham Financial, the company also locked in a LIBOR swap of $255 million as a hedge against potential rising interest rates. The transaction results in an annual interest savings in excess of $6 million. Craig Zarro of Preferred Capital Advisors based in Sacramento, Calif., served as advisor on behalf of Donahue Schriber.
In addition, the company’s major investors, the New York State Teachers’ Retirement System and the J.P. Morgan Chase Bank Strategic Property Fund, converted their $188 million of preferred stock and accrued dividends into shares of common stock. They have also committed to provide the company $100 million of additional common capital for future growth opportunities. Included in the recapitalization total is the $248.55 million 10-property refinance with Allstate Life Insurance Co. that closed May 31.
The recapitalization is described by Donahue Schriber Chairman and CEO Patrick S. Donahue as one of the most important events in the company’s 42-year history. “The Bank of America loan restructure is the last big piece of putting the company’s balance sheet in order, securing our position as a leader in the retail real estate industry,” Donahue said in a statement. “We could not have done any of this without the confidence and support of our Major Shareholders, NYSTRS and J.P. Morgan Strategic Fund. We’re grateful to them, to Bank of America and to the other banks in the syndication that share our vision.”
Plaza Centers JV Concludes $1.4B Offer
Shopping center investor Plaza Centres N.V., an indirect subsidiary of Israeli firm Elbit Imaging Ltd. said a $1.4 billion off-market takeover bid by its joint U.S. subsidiary, EPN Holdings II LLC of EDT Retail Trust had concluded.
As a result of the purchases of EDT’s units during the Offer period, EPN has increased its interest in EDT from approximately 47.8 percent to approximately 96.4 percent. EPN now plans to proceed with the compulsorily acquisition of the remaining EDT units, under the terms of the offer.
Following this, the joint venture will become the holder of 100 percent of the outstanding units of EDT and it is expected that EDT will be removed from the official list of the Australian Stock Exchange shortly thereafter.
The total cost for the 52.2 percent interest purchased and/or to be purchased in EDT totals $242 million, of which Plaza’s share is approximately $57 million.
EDT is a listed real estate investment trust focused on investing predominately in U.S. community shopping centers. It currently owns 48 assets covering 10.9 million square feet. According to EDT’s financial statements, as of 31 March 2011 EDT’s shopping centre portfolio was valued at US$1.4 billion and was approximately 89 percent leased.
Forest City Closes $350M Convertible Senior Notes Offering
Forest City Enterprises Inc. closed its offering of $350 million aggregate principal amount of convertible senior notes due 2018.
This amount includes the exercise in full of the initial purchasers' option to purchase $50 million in aggregate principal amount of additional notes to cover overallotments. Forest City received net proceeds from the offering of approximately $339.4 million, after deducting the initial purchasers' discounts and estimated offering expenses.
The notes, which were sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, will pay interest semiannually at a rate of 4.25 percent per annum and the offering price was 100 percentof their principal amount. The notes are convertible, at the holder's option, into shares of Forest City's class A common stock at a conversion rate of 46.1425 shares per $1,000 principal amount of notes, subject to adjustment in certain circumstances. This conversion rate is equal to a conversion price of approximately $21.67 per share, a 20 percent premium over the $18.06 closing price of Forest City's class A common stock on the New York Stock Exchange on July 13, 2011.
Forest City intends to use the net proceeds from this offering to reduce certain outstanding mortgage debt and notes payable, nonrecourse, to repay the outstanding balance of $46.9 million of its puttable equity-linked senior notes due 2011 on October 15, 2011, to reduce outstanding borrowings under its $450 million revolving credit facility and for general corporate purposes. Pending application of the net proceeds as described above, Forest City intends to invest the remaining net proceeds of this offering in short-term, investment grade, interest bearing securities.
ING Real Estate Closes $72.8M Loan
ING Real Estate Finance closed on a $72.8 million term loan with Invesco Real Estate.
The loan was secured by assets Invesco owns throughout the country, including a 20,000-square-foot retail condo located at 512 Broadway in Manhattan currently leased in its entirety to fashion retailer AllSaints. Other Invesco assets that are securing this loan include a 202,140-square-foot industrial property in Dallas and a luxury apartment building in Denver.
The loan transaction is sponsored by an Invesco-managed fund in Luxembourg. In addition to New York property, the loan is secured by a 202,140-square-foot industrial property in Dallas.
JLL Closes Sale of Long Island Shopping Center
Jones Lang LaSalle’s capital markets group announced the firm has closed the sale of the 116,221-square-foot Huntington Square Plaza for a group of tenant-in-common investors sponsored by Oak Brook, Ill.-based Inland Private Capital Corp. for $40.2 million. Toronto-based RioCan Holdings purchased the property.
The class-A property is long-term leased and 100 percent occupied by Stop & Shop and Best Buy.
Leading the Jones Lang LaSalle team on this transaction were managing mirectors Kris Cooper, Margaret Caldwell, Dave Wojciechowski and Associate Dan Zatloukal.
Cole Enters $34M Joint Venture with Mosaic Properties
Cole Real Estate Investments acquired the 232,000-square-foot South Elgin Crossing shopping center in South Elgin, Ill., for $34 million.
The acquisition was made through a joint venture relationship with Mosaic Properties and Development.
Constructed in 2007, the shopping center is 99 percent leased with tenants including Home Depot, Best Buy, Staples and PetSmart.
Cole acquired 50 percent of the existing entity held by Mosaic, and will be responsible for oversight of the asset, while Mosaic will continue the day-to-day management of the property.
Cole was represented by Scott Holmes, vice president of multi-tenant acquisitions. Mosaic was represented by its principals, Sherwood Blitstein and David Dresdner. Chris LaBounty and John May of May Center Advisors were instrumental in bringing the joint venture partners together.
Edens & Avant Purchases Park Road Shopping Center
Edens & Avant purchased Park Road Shopping Center in Charlotte, N.C. from Wake Forest University, Queens University of Charlotte and Wingate University, for $82 million.
Philanthropist and North Carolina businessman Porter Byrum had previously gifted the Park Road Shopping Center to the three universities and worked hard to assist them in connection with its sale.
Wake Forest, where Byrum attended undergraduate and law school, will receive slightly more than $40 million, or 49 percent, from the sale. Queens and Wingate will each receive $20.9 million, or 25.5 percent, according to Wake Forest.
Opened in 1956, Park Road Shopping Center was the first open-air shopping center in Charlotte, and the largest of its kind between Washington D.C. and Atlanta. Purchased by Porter Byrum in 1967, Park Road has experienced virtually 100 percent occupancy for the last 44 years and has enjoyed unparalleled community support in an often volatile retail market, according to Edens & Avant.
Byrum donated the center to the universities in June.
Plaza Announces Sale of Horizon Park Shopping Cener
Plaza Advisors announced the sale of the 215,713-square-foot Horizon Park Shopping Center in Tampa, Fla.
The shopping center is anchored by Babies R’ Us, Northern Tool and Equipment, Office Depot, Save A Lot and Guitar Center. The asset was constructed in 1971, renovated in 1980 and 1988 and was approximately 91 percent leased at the time of sale.
Plaza Advisors exclusively represented the seller in this transaction and co-managing partners Anthony Blanco and Jim Michalak, together with Senior Associate Lenard Williams were involved in the engagement. The seller and buyer were entities affiliated with Phillips Edison and Co. and Forge Capital Partners, respectively.
Other Notable Deals
Westwood Financial Corp. purchased the 86,267-square-foot McCrimmon Corners retail center in Morrisville, N.C., from seller Crosland for an undisclosed price. The center was built in 2005 and is 99 percent leased with tenants including Tossed Salads, Taekwondo Academy, Nikos Taverna, Saffron Indian Food Restaurant, Two Guys Grille, Subway, AT&T, Great Clips, State Farm and Red Dragon. Crosland was represented by Rob Carter of Berkley Capital Advisors.
Time Equities Inc. purchased the 5,475-square-foot retail component of The Cove Club in New York’s Battery Park City for $3.6 million. The retail space is 100 percent occupied to tenants including Kumon Learning Center, North American Youth Ballet and South Cove French Cleaners. Hy Schermer and Chris Pulling of Time Equities represented the buyer, while Nick Petkoff of Massey Knakal represented the seller in the transaction.
An affiliate of Paramount Realty acquired the 155,956-square-foot New Brite Plaza shopping center in New Britain, Conn., for an undisclosed price from WP Realty. The center is 100 percent leased to tenants including Marshalls, Save-A-Lot, Ocean State Job Lot, H&R Block, Dunkin Donuts, Rent-A-Center, Advance Auto, Radio Shack, Town Fair Tire, Rainbow, and Payless Shoes.
The Boulder Group completed the sale of a 6,533-square-foot ground leased Logan’s Roadhouse property located in Salina, Kan., for $1.45 million. The building was developed in 2008 and is ground leased on an absolute net basis to Logan’s Roadhouse for a 20-year lease term. Randy Blankstein and Jimmy Goodman of The Boulder Group represented the buyer in the transaction. The seller was a Kansas-based developer and the buyer was a Chicago-based high net worth investor.