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BUCKEYE, AZ-Vestar Development Corp. has obtained $50.8 million in permanent financing to retire its construction loan on the fully leased Sundance Towne Center. The Phoenix-based developer completed the 634,993-sf community center in the first quarter.

John Smeck, principal and managing member for Johnson Capital in Phoenix, says the 10-year, fixed-rate loan is typical of construction debt refinancing. Bank of America provided the new debt for the 76-acre Sundance Towne Center at 466 S. Watson Rd. near Interstate 10. “Now that the center is completed and stabilized, the owners move from a recourse construction loan to a non-recourse, permanent loan,” says Smeck, who arranged the financing.

Sundance Towne Center is shadow-anchored by a Wal-Mart Supercenter. Vestar’s tenants include Office Max, PetSmart and Linens n’ Things.Smeck tells GlobeSt.com that the deal was particularly challenging due to the credit crunch. “A lot of lenders are on the sidelines for the time being and pricing is much higher than it was even six months ago,” Smeck explains. “Lenders are cautious and reluctant to take on new business.”

Smeck says the market, project and developer had the right formula. “Vestar is a well-known developer, owner and manager with a high reputation,” Smeck says. “This is a first-class property and the location is excellent. All of that helped.”

It also helped that the center is in a high-growth residential area and, as of now, with little competition. Smeck points out that the closest retail similar to Sundance Towne Center is the 600,000-sf Gateway Pavilions at Interstate 10 and Loop 101, but Smeck points out that it’s 12 miles to the east.

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