Rocklin Retail Builds Get $63M Financing

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COSTA MESA, CA-Donahue Schriber Realty Group has closed two financing transactions totaling $63 million for the construction of two shopping centers the firm is developing in the Northern California city of Rocklin. The financings come on the heels of the $1.1 billion in financings the company closed in November 2013.

The most recent financings include a $56-million construction loan for Rocklin Commons, a 360-square-foot center at I-80 near Sierra College Blvd., and a $7-million interim land loan for Rocklin Crossings, a 500,000-square-foot center across I-80 from the other center. In both transactions, the firm was advised by Craig Zarro of Sacramento-based Preferred Capital Advisors. In November, a Walmart Supercenter opened at Rocklin Crossings, and this March, a Target store will open at Rocklin Commons.

The financings were provided by Union Bank on a variable-rate basis. The bank required fair pre-leasing requirements against modest advance rates; pricing was below Libor plus 2%.

According to Patrick Donahue, chairman and CEO of Donahue Schriber, “We were active in the capital markets throughout 2013, and to close out the year with these transactions puts us in a very enviable position as we start 2014. We have a long history with Union Bank and are thrilled they were able to meet our timelines and help us take advantage of an improving economy.”

Dave Mossman, Donahue Schriber's chief investment officer, commended Union Bank for its commitment to meet important deadlines, recognizing that banks and borrowers are now looking forward to new opportunities to meet the growing demand of customers and tenants alike. “We purchased the land for these centers prior to the economic downturn, but knew all along this would be a fantastic location for the scale of projects planned. To have the blue-chip tenants like we have already secured and several more in serious discussions only strengthens our position with these assets. We are excited to bring a first-class retail destination to the City of Rocklin.”

As GlobeSt.com reported in November 2013, Donahue told us there are currently very few new retail developments under construction in Southern California. “There will be very few of those projects over the next two years, but the opportunity to redo and redevelop existing properties is a major theme for all the big companies. It's important not to reinvent the wheel, but to remerchandise with how the customer has shifted.”

In other retail news, Auction.com reports that the US Census Bureau has released its December retail sales data, and while November's figures were revised modestly lower, the general uptrend in sales continues. According to Chris Muoio, senior associate and economist with Auction.com Research, “Despite recent sensationalist headlines touting that retail sales are on the decline, the US Census Bureau December report on retail sales excluding autos indicates growth in that sector. The poor results of November's revised figures spoke more to a migration online than a downshift in consumer behavior and propensity to spend. When compared to retail sales a year ago, the current downward tenor of revisions are notable, but are in fact 3.6% higher.”

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