F inancial D igest F eaturing the L ender ’ s D irectory

Real Estate Journal — November 11 - 24, 2016 — 5A


M id A tlantic

Hurricane Matthew elevates risk for 533 properties backing CMBS loans

Village Square is a 392,497 s/f, fully-leased retail center HFF handles $39.5m refinance for Pittsburgh power center

Morningstar Credit Ratings, LLC believes that 533 proper- ties, with an allocated property balance of $3.82 billion, may be at elevated risk following Hur- ricane Matthew because they are in the hardest-hit storm areas. The Federal Emergency Management Agency desig- nated these areas eligible for the highest level of federal aid. More specifically, FEMA designated 55 counties in the eastern por- tions of Florida, Georgia, North Carolina, and South Carolina as eligible for assistance to in- dividuals and households. The number of eligible counties has more than doubled since the immediate aftermath of the hur- ricane. Calls to the largest prop- erties in the metropolitan sta- tistical areas with the greatest commercial mortgage-backed securities exposure confirmed that all are open. The top five MSAs in North Carolina, South Carolina, Flor- ida, and Georgia account for 70.1% of the CMBS exposure to the hardest-hit areas. While FEMA continues to assess dam- age in the region, our analysis is based on the information reported on FEMA’s website as of October 19. Largest North Carolina Loans Spared While President Barack Obama declared a state of emergency in North Carolina, making federal funding to individuals and households available in the 27 counties hit hardest by the storm, we dis- covered that properties backing the largest loans in these areas were spared. We found 106 properties that back $1.26 bil- lion in loans in these counties, with 42.9% of this exposure in the Fayetteville MSA. Just four of these properties secure loans with balances of $25 million or more: Golden East Crossing in Rocky Mount, Carolina Premi- um Outlets in Smithfield, and Preserve at Grande Oaks and Addison Ridge Apartments, both in Fayetteville. While nu- merous area roads have been closed because of flooding, both Golden East Crossing, 2.6% of JPMCC 2007-CB18, and Caro- lina Premium Outlets, 5.0% of MSBAM 2013-C8, reopened for business on October 10, accord- ing to store representatives. We also confirmed with leasing rep- resentatives that Preserve at Grande Oaks, 2.6% of COMM

2014-UBS3, and Addison Ridge Apartments, 2.7% of CSAIL 2015-C4, are both open. Minimal Effect on Properties Backing Largest S.C. Loans We found that properties backing the largest loans in Hilton Head Island, South Carolina, were also spared. On October 8, the hurricane made landfall near McClellanville, South Carolina, in the south- eastern portion of the state, prompting the government to make federal funding avail- able to affected individuals and households in 17 hard-hit counties. We found 106 proper- ties that serve as collateral for $641.7 million in CMBS debt, with over 52% of this exposure in the Hilton Head Island- Bluffton-Beaufort MSA. Loans for two of these prop- erties, both hotels, have an outstanding balance exceeding $35 million and include The Westin – Hilton Head (JPMCC 2007-C1 and JPMCC 2008-C2) and Beach House Hilton Head (COMM 2015-LC23). Florida and Georgia Exposure FEMAmade assistance avail- able to four Florida counties. In the Daytona Beach area, the hurricane caused a four- to six- foot storm surge, which flooded some areas; wind speeds rose to at least 60 miles per hour, leaving damaged roofs and signs, downed trees and power lines, and power outages. We found 110 properties in three of the four eligible Florida coun- ties that serve as collateral for $599.7 million in CMBS debt, with over 94% of this exposure in the Deltona-Daytona Beach- Ormond Beach MSA. The loan for just one of these properties has an outstanding balance of at least $23 million. Although Savannah, Georgia, and much of the state avoided Matthew’s worst effects, the storm caused floods and power outages. There are 73 proper- ties across the seven Georgia counties eligible for individual and household federal aid that serve as collateral for $1.32 bil- lion in CMBS debt, with over 75% of this exposure in the Savannah MSA. Loans for five of these properties, consisting of three hotels, a mall, and an apartment complex, have an outstanding balance of at least $30 million. n

ITTSBURGH, PA — Holliday Fenoglio Fowler, L.P. (HFF) announced that it has ar- ranged a $39.5 million refi- nancing for Village Square, a 392,497 s/f, fully-leased retail power center in the Bethel Park area of Pittsburgh. HFF worked on behalf of the borrower, Oxford Develop- ment Company , to place the 10-year, fixed-rate loan with Goldman Sachs & Co. HFF will service the securitized loan, proceeds of which were used to primarily pay off a maturing loan. Village Square was built in 1982 and renovated in both 1997 and 2003. Anchored by Home Depot, Kohl’s, Burling- ton Coat Factory, Michael’s, Office Depot and Toys"R"Us, the two-story center is also home to a variety of national and regional tenants, includ- ing Half-Price Books, Sten’s Stride Rite Shoes, Famous Footwear and Avenues. Ad- ditionally, the center’s out- parcel pads are leased to Olive Garden, TGI Friday’s, Penn- zoil and PA Wine & Spirits. Situated in Bethel Park on 31.4 acres at 4000 Oxford Dr., Village Square’s locale at the P WASHINGTON, DC — Greysteel , a national com- mercial real estate investment services firm, has arranged $14.9 million in senior debt and preferred equity for the acquisition and construction of 1724 Kalorama Rd., NW, a vacant commercial prop- erty located in the infill Ad- ams Morgan neighborhood of Washington, DC, on behalf of Bellevue LLC. The financing includes a senior construction loan and preferred equity, which were provided by different inves- tors. The two-year construc- tion loan is nonrecourse in nature and features a fixed interest rate. This transaction was negotiated by Greysteel senior director, Brendan Scanlon , who is based in the

Home Depot at Village Square

intersection of Fort Couch Rd. and U.S. Rte. 19 places it in the heart of Pittsburgh’s South Hills, one of the most densely populated and affluent areas in Pittsburgh. The center is approximately 10 miles from downtown Pittsburgh. HFF’s debt placement team was led by managing director Claudia Steeb and execu- tive managing director John Pelusi .

“HFF appreciates the op- portunity to place this loan on behalf of Oxford Development with Goldman Sachs,” Steeb said. Oxford has been active in the South Hills area since 1962 when they broke ground with their inaugural project, South Hills Village Mall, and most recently with the renovation of the Crowne Plaza Hotel & Suites Pittsburgh South. n

Greysteel arranges $14.9m in senior debt and preferred equity for vacant property

1724 Kalorama Rd., NW

company’s Washington, DC office. The vacant office building will undergo a two-story addi- tion, and will be converted into a 48-unit multifamily property with four parking spaces. The property is located less than a block from a Harris Teeter market and approximately

two blocks from the 18th St. retail corridor. 1724 Kalorama is situated within walking dis- tance of the Columbia Heights, Woodley Park-Zoo, Dupont Circle, and U Street/African- American Civil War Memo- rial/Cardozo metro stations, served by the Green, Yellow, and Red lines. n

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