CMBS Shops Target Grocery-Anchored Retail Trades

RICHMOND, VA-Short Pump Station, an 85,720-square-foot Trader Joe’s-anchored retail center, has traded here. AmCap Richmond LLC, a joint venture between AmCap and BayNorth Realty Fund VII, purchased it from S.J. Collins Enterprises, a Fairburn, GA-based retail development company.

Boston-based Colliers Meredith & Grew’s Kevin C. Phelan and Jeffrey D. Black helped the borrower secure a $20.5-million loan for the center, which is located in Richmond’s Short Pump submarket. The sales price has not yet been recorded, but Black tells GlobeSt.com that it was financed at a sub par 70% LTV.

Aviva Investors, the global asset management business of insurance company Aviva plc, provided the 10-year, fixed-rate loan for the acquisition. At closing, the property was 94% leased with national or credit tenants accounting for over 70% of net rentable area.

The loan was highly sought after, Black says, including by all the major CMBS shops that are active right now. In general, grocery-anchored retail has become so competitive it can be considered a core asset. If you are in a primary market and the asset is stabilized you will command strong quote from both life and CMBS companies, Black says.

At that point, he adds, the decision comes down to the borrower and how it wants to structure its debt. Because CMBS lenders allow the borrower to push the leverage, LTVs can go as high as 75%, Black says. “Life companies just are not playing there right now,” he continues. “Both life and CMBS might finance a solid deal anywhere from 5.4% to 6% over a 10-year term.”