grocery-anchored retail are
consistently coming in under 4%.
WASHINGTON, DC-Life companies are not taking a chance on being crowded out of the best retail deals in 2013, Walker & Dunlop’s Sandor Biderman tells GlobeSt.com. “Life companies are adopting aggressive stances now for these deals. They’re not waiting for 2013.”
Grocery-anchored retail, of course, is the preferred asset for life companies, Biderman says—indeed they have become second only to multifamily and perhaps trophy office. “Just last week we saw 10-year rates quoted as low as 3.05% and 15-year deals as low as 3.7%,” Biderman says. Those rates were for lower-leveraged transactions, but even deals with higher leverage are securing healthy financing, he says. “Those are coming in 40 to 50 basis points higher. We’re now seeing long-term money consistently price under 4%” for grocery-anchored retail.
Grocery-anchored retail has long been a favorite of life companies, as well as other lenders. This new aggressiveness on the part of life companies, though, came at the beginning of Q4 when they started looking ahead to 2013 production, Biderman says: “They realized then that it would be difficult to hit their allocations.” They reacted by keeping up their lending pace and by changing their focus on spread-based lending as opposed to floor-based.
Not that life financing for retail was stingy or scarce this year. Walker & Dunlop reports that it arranged $328.5 million in financing for retail centers located in the DC area for the first three quarters of the year. Among these was a $32.5-million refinance loan for Springfield Plaza Shopping Center, in Springfield, VA. Walker & Dunlop secured 10-year interest-only financing at a below-market rate, coupled with a forward funding. Walker & Dunlop also arranged $41 million in financing for Vista Gardens Marketplace, in Lanham, MD. The permanent loan was structured with a 15-year term and a 30-year amortization period.