Three Retail Assets in Two States Lock In $11M Refi

DALLAS-In a complicated retirement of three loans, the Dallas-based Shafer Property Co. has secured more than $10.8 million for retail assets in Texas and Colorado. The 10-year loan includes mezzanine financing that runs co-terminus with the first lien mortgage to set up a blended rate in the upper 6% range.

"It was kind of a clean-up exercise more than anything else," Brad Donnell, senior director for Metropolitan Capital Advisors Ltd. of Dallas, explains to GlobeSt.com. The fresh capital retired loans from Sterling Bank and Colonial Bank in Dallas and a private trust from Waco, he says. The new money came from JPMorgan in New York City and MezzCap Finance, which has offices in New Jersey and Austin.

Not only does the mezzanine money run co-terminus with the first lien, but it also has the same amortization, 28 years, Donnell says. The ability to get additional capital at a blended rate still in the 6% range was the deal-maker for the MezzCap add-on, according to Donnell.

The hurdle to jump was a cross-collateralization of the 41,980-sf Sherman Crossing, positioned at the intersection of US Highways 82 and 75 in Sherman, TX, and the 12,722-sf Maple Crossing along Maple Avenue in Dallas. The new financing included the 10,800-sf Durango Town Center in Durango, CO, where an expansion of 25,200 sf is on the drawing board. Donnell says he's putting together a $4.8-million financing for the expansion to the center, built in 1998 and enlarged earlier this year.

As a result of the financing, Shafer Property has brought a two-tenant retail holding with 11,200 sf to market in Sherman and opted to hold a smaller multi-tenant asset for awhile longer, according to Donnell. He says the transaction took nearly four months to complete, but the end result is Shafer's locked in a low interest rate, retired debt from three lenders and is squared away for tax time.