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DALY CITY, CA-Capital and Counties USA refinanced Serramonte Center, its 863,000-sf regional mall here, with a $95-million loan from Cigna that was funded through its Northmarq mortgage banking correspondent. Sourced by Buchanan Capital Advisors, the seven-year fixed-rate loan carries an interest rate of less than 5%.Capital and Counties is a wholly owned subsidiary of UK property giant Liberty International PLC. A source familiar with the transaction tells GlobeSt.com that Capital and Counties refinanced the property in order to recapture equity that will be used to continue expansion and renovation of the property. Cigna took out its own loan in the transaction.Built in 1968, Serramonte Center is located 15 minutes south of San Francisco at the crossroads of the 280 Freeway and US Highway 1. Capital and Counties acquired the 80-acre property in 2002 for $119 million with plans to enhance the center and capitalize on the strong location. The company is now in the midst of a capital improvement plan and has so far invested over $5 million in common area upgrades. Completed improvements include new interior and exterior landscaping and a waterscape feature with a giant Koi pond. An exterior renovation is currently under way, and the ultimate plan calls for the ability to expand the center and reconfigure the main entryway. Serramonte Center is 98% leased. Major tenants include Macy’s, Mervyn’s, and a new Target Greatland that joined the center last year, taking over a space formerly occupied by Montgomery Ward. Target Greatland now has two locations within one mile of each other. The other location is in nearby Colma.In explaining the proximity of the two stores, a source at Buchanan tells GlobeSt.com that rising consumer spending and economic recovery in the Bay Area is compelling tenants to expand. Target Greatland’s move reportedly occurred for at least three reasons: the dense and affluent demographic that lives in the area; a perceived increasing trend in retail sales; it prevents competition such as Wal-Mart from easily entering the local market.The Buchanan Capital Advisors team of Jeff Eliason and Jed Gates arranged the Serramonte Center financing for Capital and Counties. Buchanan Capital is a division within Newport Beach-based Buchanan Street Partners that provides mortgage brokerage and advisory services. The division has secured over $640 million in financings for its clients thus far this year, with 20% of that figure in retail properties. Buchanan says it is on pace to surpass last year’s record $1.1 billion in financings.

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