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Refinancing of middle market lifestyle center with entertainment anchors
The Challenge
Sponsor was refinancing a 175,000 SF lifestyle center with a maturing CMBS loan. The asset carried two entertainment anchors on long leases but also 18% exposure to soft-goods co-tenants below investment grade. CMBS pricing had widened and agency was not an option for retail.
The Structure
10-year fixed-rate senior loan from a life company at 55% LTV, sized on a trailing-three-year average NOI rather than in-place to account for co-tenancy risk. Cash-out of roughly $9M funded TI capital and sponsor promote.
The Outcome
Full maturity payoff with cash-out. Coupon locked in ahead of a subsequent 35 bps widening in life company spreads. Sponsor has a decade of capital stability to reposition the non-anchor space.
Deal Mechanics
10-year fixed rate with cash-out proceeds
NOI sized on T-3 average, not in-place
Rate locked ahead of 35 bps spread widening
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