Citibank, Pembrook Loan $95M To Ravaged Mall

According to Stuart J. Boesky, CEO of lender Pembrook Capital Management, Oakwood Center, at 197 Westbank Expressway, sustained damage from the hurricane and subsequent looting and fire. In the aftermath, nearly 80% of the stores experienced some kind of fire or water damage following Katrina, and the mall was all but shut down.

Pembrook Capital made its first investment in New Orleans through a two-year, variable rate construction loan to mall owner General Growth Properties Inc. of Chicago. "This loan is meant to rebuild, and to get the center running again," Boesky says. "We'd expect that General Growth will refinance us out with a lower cost of funds once the term expires." The remaining $75 million came from Citibank, also of New York City.

Construction during the past year has been geared toward fixing up the center's interior including anchors, the food court and small shop space. "This represented a major retail destination for the area, and the community really needs it," Boesky adds.

Though the main shopping area is closed, a few stores are operational. These are Dillard's Inc., Sears Roebuck and Co., Foot Locker Inc., Dollar Tree Stores Inc. and Bank of Louisiana. The center will be 92.7% occupied upon reopening.

Boesky tells GlobeSt.com that the property represented a solid investment opportunity for Pembrook Capital for a variety of reasons. Pembrook has a record of community service investments, and Oakwood represented an ideal opportunity to assist in redevelopment. Additionally, "New Orleans has probably come back slower than people thought. But long-term, we're big believers that earlier movers and investors in the area will benefit," Boesky says.