COSTA MESA, CA-Donahue Schriber has secured $255 million in funding to refinance 11 of the company's shopping centers in California, Nevada and Arizona, according to CBRE|Melody, the real estate investment banking division of CB Richard Ellis. The financing, designed to lock in desirable rates and to provide flexibility for the borrower, consists of a LIBOR-based interest-only floating rate loan which was swapped to fixed.
The funding, at a 75% loan-to-value ratio, was arranged by Sharon Kline of Melody's Newport Beach office and Mary McDonald of the company's San Francisco office. Allstate Life Insurance Co. provided the financing.
Kline and McDonald note that the cross-collateralized loan is structured to provide the borrower with maximum flexibility. For example, 50% of the loan will be due in six years and 50% in seven years.
In addition, the loan provides prepayment flexibility that was an important factor for the borrower. The entire loan will be funded over the next year, with the largest portion of $161.3 million to funded in mid-January and secured by seven of the 11 properties.
The retail portfolio consists of 11 shopping centers built between 1984 and 2000 with a combined net rentable area of more than 1.36 million sf. At the time of financing, average occupancy of the properties was 99%.
The centers include nine in California, one in Nevada and one in Arizona. All of the shopping centers are grocery anchored except for Natomas Marketplace in Sacramento, which is a power center.
In addition to Natomas, the other California centers are Marketplace 99 in Elk Grove, Roseville Center in Roseville, Portola Village in Livermore, Raley's Plaza in Fairfield, Callen's Corner I and Callen's Corner II in Fountain Valley, the Marketplace in Bakersfield and Aliso Pacific Plaza in Aliso Viejo. The other two properties are Gold Canyon Plaza in Tucson and Eldorado Village in North Las Vegas.
Kline says that the structure was driven by the borrower's goal of obtaining maximum leverage and maximum flexibility. She calls the loan "a unique structure for a life insurance company."
David Kocourek, portfolio manager for Allstate Investments, says the company is looking for properties concentrated in fast-growing regional economies like those where the centers are located. Two of the loans in the portfolio had existing Allstate debt on them that were originated by Melody.
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