The loan, from an undisclosed life company, is estimated to be 55% of the combined value of the properties--though effective leverage is higher due to the interest-only structure. The interest rate is 7.75%, according to an SEC filing. The loan was rate-locked early in the second quarter.
All eight properties are previously unencumbered retail centers with grocery anchors in California, Texas and Florida. The specific assets were not revealed by the parties involved and not otherwise immediately available.
John Petersen, SVP of Portland CBRE Capital Markets, sourced the loan for Regency, which he says is considered a strong borrower because of its high-quality assets. He declined to discuss any deal specifics but did talk generally about the state of the market.
Life companies, he says, are finding themselves with little competition for 10-year loans after years of heavy competition from banks and conduits. "Two years ago, amid the heavy competition, life companies had to take more risk [high LTVs, lower interest rates] than they wanted in order to place funds," he says. "Now, compared to that, they can all move to the middle of the strike zone where there is the least risk, underwrite more cautiously and get paid an interest rate in the mid-to-high 7% range for relatively negligible risk."
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