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SAN DIEGO–The San Diego office of Holliday Fenoglio Fowler L.P. has arranged $31 million refinancing for Village Hillcrest, a 577,535-sf mixed-use center in the Hillcrest neighborhood.

Working on behalf of SunCoast Properties Inc., HFF director Aldon Cole and associate director Rob Hinckley placed the 10-year, 5.97% fixed-rate loan with John Hancock Real Estate Finance. Loan proceeds will prepay and retire an existing first lien financing with the remaining funds earmarked for SunCoast’s future growth opportunities. Privately-owned SunCoast manages and leases approximately one million sf of commercial properties in Orange County and San Diego.

Specifically, the financing goes to pay paid off a Deutsche Bank loan from 1998 that was maturing, and that will free up SunCoast to do other deals in Southern California, Hinckley says. “They’re using some of the proceeds from this financing too look at other acquisitions around the Southern California area,” he says.

There are no plans to put the center up for sale, he says, adding, “This is definitely a long-term hold, and they have no foreseeable plans to sell it.”

The center is traditionally 90% to 100% leased. “It’s a stabilized property,” Hinckley notes, adding that lease rates are comparable to the surrounding market.

The center contains office, medical and residential and a 705-stall parking structure.Village Hillcrest is at the intersection of 5th Avenue and Washington Street in the Hillcrest/Uptown community two miles north of San Diego’s central business district. The property was completed in 1992 and has six buildings, including a medical office and hospital building, a retail/office building, two retail/residential buildings, two additional retail buildings, and a four-story parking garage. The square footage of the property is comprised of roughly 17% retail, 22% medical, 13% office, 45% hospital and the remainder is small suites. Tenants include the Hillcrest Cinemas, 24-Hour Fitness and Scripps.

“It’s kind of a landmark there in the Hillcrest area,” Hinckley says. A 10-minute drive from Downtown San Diego, Hillcrest, an upper middle-class area that attracts as residents and visitors many young professionals because it’s eclectic, it has many dining and entertainment venues and it posses an artistic appeal, Hinckley adds.

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