Developers Diversified Realty Corp. closed on the refinancing of its two senior unsecured revolving credit facilities. A new $950 million unsecured facility, arranged by J.P. Morgan Securities LLC and Wells Fargo Securities LLC replaces DDR's $1.25 billion facility maturing in June 2011.
The new facility has an uncommitted accordion feature for a total facility of up to $1.2 billion and a 40-month term that expires February 28, 2014. DDR also closed on a new $65 million unsecured revolving credit facility provided solely by PNC Bank N.A., which replaces DDR's $75 million facility maturing in June 2011. This $65 million unsecured facility also has a 40-month term that expires February 28, 2014.
Pricing on both new revolving credit facilities is currently set at LIBOR plus 275 basis points and is determined based upon DDR's current corporate credit ratings from Moody's and S&P. There are no LIBOR floors. The covenants on the new facilities include an unencumbered net operating income yield test and several minor modifications to the previous facilities' covenants.
In conjunction with the closing of the new unsecured facilities, DDR modified its secured term loan, agented by KeyBank M.A., to conform to the amended covenants in the new unsecured revolving credit agreements. In addition, DDR made a voluntary prepayment of $200 million on the term loan leaving an outstanding balance of $600 million. The pricing on the term loan remains unchanged as of the closing of the amendment at LIBOR plus 120 basis points and the final maturity remains February 20, 2012.
In a separate deal, a joint venture between DDR and Israel-based Big Shopping Centers Ltd. bought the Marine Gateway commercial center in San Francisco for $36 million.
Big's U.S. subsidiary will own 75 percent of the property and Developers Diversified will own 25 percent and manage it. The Marine Gateway commercial center carries a $29 million loan, scheduled for repayment in March 2015. The loan will be deducted from the purchase price, resulting in a final price tag of $7 million, of which Big will pay $5.3 million.
This is the first acquisition by Big and DDR through their joint venture, which they set up earlier this year.
CBL & Associates Announces Closing of $102.1M Offering
CBL & Associates Properties Inc. has closed an underwritten public offering of 4.4 million depositary shares, each representing 1/10th of a share of its 7.375 percent Series D cumulative redeemable preferred stock with a liquidation preference of $25.00 per depositary share.
CBL has granted the underwriters of the offering a 30-day option to purchase up to an additional 660,000 depositary shares to cover over-allotments, if any. Including the shares issued in this offering, the company now has 17.7 million depositary shares outstanding, each representing 1/10th of a share of its 7.375 percent Series D cumulative redeemable preferred stock. The securities are redeemable, in whole or in part, for $25.00 per depositary share, plus accrued and unpaid dividends, at any time at the option of the company. These securities have no stated maturity, sinking fund or mandatory redemption and are not convertible into any other securities of the company.
Wells Fargo Securities LLC served as the sole book-running manager of the offering. This offering was made pursuant to an effective registration statement filed with the SEC.
Cedar Closes More Purchases
Cedar Shopping Centers Inc. completed the purchase on behalf of the joint venture between Cedar (20 percent) and RioCan REIT (80 percent), of five primarily supermarket-anchored properties for approximately $91 million, exclusive of closing costs and adjustments. (It closed the purchase of a sixth property last week.)
The properties include Gettysburg Marketplace in Gettysburg, Pa., York Marketplace in York, Pa., Northland Center in State College, Pa., Marlboro Crossroads in Upper Marlboro, Md., and Towne Crossings in Midlothian, Va. The gross leasable area of the portfolio is approximately 678,000 square feet. The sellers were entities affiliated with the Edens & Avant.
The joint venture expects to arrange 10-year fixed-rate financing on the properties in the amount of $50.6 million (approximately 55 percent of the purchase price) at a rate of not more than 5 percent.
Cedar's equity investment at closing was approximately $18.2 million, and RioCan's, approximately $72.8 million. Upon placement of fixed-rate mortgage financing on the properties, approximately 55 percent of such equity contributions are expected to be refunded to the parties.
Cedar will provide property and financial management, leasing, reporting, financing and construction management services for the properties and has also received certain acquisition fees.
In a separate deal, Cedar Shopping Centers also completed the purchase of 11501 Roosevelt Boulevard in Philadelphia for approximately $13.4 million, excluding closing costs and adjustments. The property consists of an existing 230,000-square-foot building on approximately 15.3 acres. It is immediately adjacent to another property, 11601 Roosevelt Boulevard, now owned by Cedar, consisting of a 430,000-square-foot building on approximately 23.9 acres. Both properties are presently leased to the U.S. General Services Administration for use by the Internal Revenue Service with leases extending to October 15, 2011. The IRS is expected to vacate the buildings on or before that date.
The purchase for the property was funded with approximately $2.5 million in cash, including, among other things, funds for replacement of reserves and payment of certain transfer taxes, above an existing first mortgage of approximately $13 million due March 2012 assumed by Cedar. Cedar has announced no present plans for development of the two properties.
Forest City Closes $62M Financing for Mixed-Use Property
Forest City Enterprises Inc. announced that subsidiaries closed a 10-year, $62 million loan for the company's Station Square mixed-use property in Pittsburgh. The CMBS financing carries a 5.85 percent interest rate and allowed repayment of three separate bank loans totaling $58.6 million.
The 652,800-square-foot Station Square is located on Pittsburgh's south side along 1.2 miles of the Monongahela River. Tenants include Hard Rock Cafe, the Gateway Clipper Fleet and U.S. Bank.
HFF Closes Flurry of Deals
Holliday Fenoglio Fowler L.P. (HFF) had a busy week announcing the closing of a series of financings and sales around the country.
In the largest deal announced by the firm, its Miami and Pittsburgh offices secured $48.5 million in permanent first mortgage financing for the Port Charlotte Town Center in Port Charlotte, Fla.
HFF executive managing director Manny de Zárraga, director Luis Castillo and managing director Danny Finkle, in conjunction with managing director Claudia Steeb and executive managing director and managing member, John Pelusi, Jr. of the Pittsburgh office of HFF, worked exclusively on behalf of Simon Property Group. The HFF team secured the 10-year, fixed-rate loan through RBS Securities Inc., which replaced a maturing facility on the property.
Port Charlotte Town Center is anchored by Dillard’s, JCPenney, Macy’s, Sears, Bealls and a 16-screen Regal Cinema.
In another deal, HFF’s Washington, D.C. office closed the $15.05 million sale of 11503 Rockville Pike, a 20,149-square-foot retail building in North Bethesda, Md.
The HFF investment sales team was led by senior managing directors Jim Meisel and Dek Potts who represented the seller, JBG Rosenfeld Retail. Saul Centers Inc. purchased the property, which is fully leased to Staples and Casual Male.
In a third deal, HFF’s San Diego office arranged a $9.75 million refinancing for four mixed-use properties totaling 48,065 square feet in San Diego’s Gaslamp Quarter.
HFF associate director Patrick Burger and senior managing director Tim Wright worked exclusively on behalf of the borrower, Burni Enterprises, and its asset manager, Cardinal Group Investments LLC, to secure the three-year, adjustable-rate, non-recourse loan through a major New York-based debt fund. Loan proceeds are retiring existing debt on the property in addition to funding the conversion of two assets to retail and residential loft uses.
Finally, HFF’s New Jersey and New York offices closed the sale of 1300 Franklin Avenue, a 125,495-square-foot, class-A office and retail development in Garden City, Long Island.
The HFF investment sales team was led by senior managing directors Jose Cruz and Andrew Scandalios and directors Kevin O’Hearn and Jeff Julien, who marketed the property on behalf of the seller, Alfred Weissman Real Estate Inc. Intercontinental Real Estate Corp. purchased the property for an undisclosed price.
Originally built in 1962, 1300 Franklin Avenue was completely redeveloped in 2008 into a two-story office and retail complex that is fully leased. Key tenants include Winthrop University Hospital, Healthtrax, Morgan Stanley Smith Barney and Walgreens.
Pembrook Capital Management Originates $19.9M Loan
Pembrook Capital Management LLC provided pari passu first mortgage financing together with a Wall Street firm. The loan was for a total amount of $19.9 million and has a ten-year term and a 5.85 percent fixed rate. The first mortgage represents an approximate 69 percent loan to value.
The property is located at 6904 Hollywood Boulevard, on the Walk of Fame, directly across the street from the Kodak Theatre, in the heart of Hollywood. The sponsor, CIM Group, purchased the property in 2007 and has a total cost basis of approximately $30 million, including a $17 million renovation which was completed in July 2009.
Aries Capital Investment $17M on St. Louis Property
Aries Capital’s affiliate Urban Development Fund LLC provided $17.5 million in financing to facilitate the redevelopment of the 540,000-square-foot St. Louis Centre in St. Louis.
The former shopping mall and will undergo a $35 million redevelopment beginning this year. This investment was made possible by an allocation of New Market Tax Credits. The property is adjacent to a the 25-story One City Centre office tower and is currently 100 percent vacant.
The redevelopment project is intended to serve as a catalyst for the redevelopment of the “Mercantile Exchange District”, which will feature the renovation of One City Centre, the St. Louis Centre and the Dillard/Laurel building.
UDF provided two loans totaling $17.5 million. Using NMTC financing allowed UDF to provide a below-market rate and other flexible features including: higher than standard loan-to-value, more flexible borrower credit standards, and lower than standard debt service coverage ratio. The redevelopment of the St. Louis Centre will include 60,000 square feet of first floor retail space, a movie theater and banquet hall on the second floor and a parking garage for 750-vehicles on the remaining two floors of the structure.
Franklin Street to Handle Food Lion Portfolio in Three States
Franklin Street has been retained by Food Lion LLC to handle retail management and leasing, along with selective disposition of properties, for its locations in Georgia, Florida and Tennessee.
Franklin Street will be handling management and leasing for nine of Food Lion’s locations.
Mac McCall, Brad Sebring and John Tennant of Franklin Street, who will be overseeing the Food Lion work.
Other Notable Deals
Agree Realty Corp. sold a 14,820-square-foot Walgreens in Ocala, Fla., for $4.1 million.
Charles Dunn Co. closed a $3.1 million sale of a 10,000-square-foot retail building at 3100 Gilbert Road in Chandler, Ariz. Paul A. Kenworthy of Charles Dunn’s West Los Angeles office represented the buyer OSSA TRUST. The seller was Glenwood Development. The property is 100 percent occupied by La Petite Academy on a long-term lease.