Shopping center rebounds post $10MM loan cut
We recently published a story about a distressed grocery-anchored Shopping Center with over 90,000 s/f available for rent representing over 50% of the total NRA. The road to recovery was paved with multiple obstacles: •Property was 57% vacant •$10MM over leveraged CMBS Loan vs. current Property value •Weak tenant market & $3MM of TI required •Special Servicer negotiation and document challenges Working in lockstep, The Henley Group and the borrower were able to get the lender to cut the A note by $10MM. In the past few months, the ownership has signed leases with two national, big box stores increasing occupancy by 39,000 s/f. The center’s overall occupancy has improved to approximately 82% and debt service is comfortably over 1.00x. Nationwide, newer retail centers are phasing out aging plazas and strip malls. Having worked on a myriad of retail projects, we strongly suggest that retail owners assess their property’s value 6 to 12 months prior to refinance. While 2/3 of retail loans pay off in full at maturity; 1/3 of retail loans do not. Borrower’s may need to modify or restructure their loan so that the required reinvestment capital produces an acceptable return given the current capital stack. Certain 2006 and 2007 vintage CMBS retail loans are particularly vulnerable to refinancing difficulties as many of these properties were financed at the peak of the capital markets. Owners with complex CMBS issues have been our clients for eight years, 100% focused on our craft, we give you our expertise and give you back your time.