IRVINE, CA-Silver Creek Properties has secured an $89-million loan through Cohen Financial in order to acquire 46 shopping centers totaling more than 762,000 sf in 20 states for just under $100 million. Silver Creek acquired the properties from a Midwestern owner that developed them.
Mark Strauss, managing director at Cohen Financial in Newport Beach, tells GlobeSt.com that the seller developed the centers, beginning in 1999, to capitalize on the presence of nearby Wal-Mart stores, which shadow-anchor all of the 46 properties. Strauss, who arranged the $89-million financing, says that the portfolio was approximately 92% leased at the time the deal closed and that Silver Creek plans to enhance the portfolio through a leasing and management program.
One of the biggest challenges of the deal was finding a lender that could conduct the required due diligence across 20 states and 46 different properties "in a timely and cost effective manner," Strauss says. The lender was a Wall Street conduit loan provider.
One of the objectives of the financing was to keep the buyer's equity to approximately 10% of the purchase price. The $89-million, five-year fixed rate interest-only loan fit the bill, Strauss says.
Tenants in the centers are a mix of national, regional and local businesses that tend to do well in centers that are shadow-anchored by Wal-Mart, which drives traffic to the centers, according to Strauss. He says the tenants at the 46 properties tend to be value-oriented retailers that are popular with the same customers who shop at Wal-Mart.
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