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MOBILE, AL-A joint venture between Kimco Realty Corp. and GE Commercial Finance has obtained $26.5 million to finish upgrading the 525,505-sf Mobile Festival Centre. The JV inherited the asset in late 2005.

According to David M. Fishler, vice president with the New York City office of lender Capmark Finance, the JV acquired the 1970s-built center on 53.5 acres at 3725 Airport Blvd. as part of a larger company merger. “Kimco has multiple branches in the company. One deals with their real core, stable assets, then they have another tier, which handles value-added properties. This is in that tier,” Fishler says.

Fishler tells GlobeSt.com that Kimco’s repositioning plan is to fill it with credit-worthy tenants. Mobile Festival Centre was at 64% occupancy when it was acquired. Fishler says the New Hyde Park, NY-based Kimco considers 95% as stabilized. While the front part of the center along the frontage road has been rehabbed, the loan will handle work on the back sector.

Fishler says Capmark liked the deal for several reasons, including location and borrower. “Kimco is one of the best retail operators in the country,” he adds. “We wanted to do this type of a deal with a company that has expertise and professionalism so the money is well-spent here.”

Fishler says the interest-only, three-year loan carries two, one-year extension options. The interest rate is sub-200 basis points over the 30-day Libor. He says the loan was structured to fit the asset development, with an initial advance and future funds allocated as needed for future development. “That way they’re only paying interest on the outstanding amount as they need it,” he says. “This is an excellent product, perfect for repositioning an asset and getting it ready for a permanent loan.”

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