MID ATLANTIC — The Henley Group assisted an owner of a 160,000 s/f grocery-anchored shopping center with a 57% vacancy. Given the grocer’s space accounted for approximately 60,000 s/f, the in-line retail vacancy rate of approximately 75% was an economic drag on the property. Due to the sustained anemic retail market conditions along with new competitors gaining traction, re-leasing the storefronts proved difficult. Additionally, a major employer had closed down operations in 2011, negatively impacting consumer demand.
The value of the property had dropped significantly since the CMBS loan was securitized in 2007. Without Lender relief the sponsor was not incentivized to make investments needed to re-lease the property and the property would likely have gone back to the lender at a distressed valuation.
Owners with complex CMBS issues have been clients of The Henley Group for eight years.