Barry Slatt Mortgage Chief Operating Officer Michael Kaplan recently closed two loans secured by retail properties in Southern California. The portfolio consisted of a 3rd Street Promenade retail property and a Target anchored retail shopping center. Financing for this complex deal was arranged through a CMBS lender.
Two loans totaling $41,250,000 allowed the borrower to refinance maturing CMBS and Life Company loans for respective properties. The challenge for the borrower was to secure a lender who could provide the fixed rate facility without requiring a cross collateralization of the two properties. Lenders would have typically required the properties to be crossed given that the largest tenant in the Promenade property planned to vacate at the end of the year.
Barry Slatt Mortgage was able to overcome the occupancy hurdle by leveraging the current demand for space on the 3rd Street Promenade, and communicating the borrower’s confidence in their ability to re-tenant the space in a timely manner due to their over 30 year tenure as landlord on the Promenade. With that understanding, the CMBS lender felt comfortable in their ability to sell through to their securitization partner without the need to cross the Promenade loan with the Target center property. In the end the CMBS lender closed the financing requiring only limited structure for tenant improvement and leasing commission while providing a 10-year fixed rate loan with 3 years of interest only.