TNP Strategic RetailTrust

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In addition to its acquisition and disposition activities,Thompson National has formed a new subsidiary, Commerce TNP LLC,that acquired the asset services division of Commerce CRG of Nevadain Las Vegas and by doing so increases TNP's assets undermanagement by approximately three million square feet to a total ofmore than 17 million square feet.

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Thompson tells GlobeSt.com that the company is buying the OrangeCounty office portfolio for approximately $55 million at a 9%-pluscap rate from a distressed seller via Thompson's participatingnotes program. It is acquiring the Hawaii retail center in Honolulufor $25.7 million through its TNP Strategic Retail Trust, buying aTucson drugstore-anchored retail center for $8 million andacquiring a Fort Worth area retail center through its DelawareStatutory Trust 1031 Exchange program for $4 million. The Hawaiiand Fort Worth properties are due to close at cap rates of morethan 10%. Thompson is selling the Washington, DC-area industrialproperty for $16.5 million on behalf of tenant-in-commoninvestors.

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The Orange County office portfolio is about 80% occupied and iscash-flowing at that occupancy, but it holds potential for higheroccupancy despite the weak Orange County office market, accordingto Thompson. He explains that many of the tenants in the portfolioare government agencies, and one of the three buildings isespecially well-suited to being upgraded to LEED standards.

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"County, state and federal tenants are under mandates to be inLEED-Silver or better buildings," Thompson explains. Many of thosegovernment tenants are in buildings that are not LEED certified,and "There are not a lot of landlords like us who have the capitalor the expertise to bring these buildings to LEED standards," hesays.

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Regarding the retail deals, Thompson says that his company isfocused primarily on grocery-anchored retail centers right now. TheHawaii center under contract, for example, is the Waianae Mall,which is anchored by a Long's Drug Store, and the Tucson center isalso drugstore-anchored. The company is looking at other propertytypes too, however, such as some industrial space it is innegotiations on in Southern California and Las Vegas.

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In the Las Vegas market, Thompson notes that the additionalinvestment properties that it is gaining in the formation ofCommerce TNP LLC and its acquisition of Commerce CRG asset servicesdivision are primarily located in Southern Nevada. He says that theacquisition "increases the market coverage for both companies andallows us to deliver an expanded list of receivership, propertymanagement and advisory services to our growing clientele offinancial institutions, accredited investors and mortgageservicers."

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David Jewkes, managing director of Commerce CRG, says thatCommerce TNP LLC "will continue the close professional associationwith Commerce/Cushman & Wakefield in Las Vegas and our manyshared clients."

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