The mortgage is secured by Capital City mall, a 607,873-sf regional facility located at 3506 Capital City Mall Dr. in Camp Hill, a suburb of Harrisburg, Pennsylvania's state capital. The bulk of the proceeds from the loan, $42.5 million, are being used to prepay an existing mortgage on Capital City that includes a $4.1 million yield maintenance prepayment penalty. The penalty, along with $20,000 in deferred financing charges, will go on the REIT's balance sheet as an "extraordinary loss" this month. The loan closed Jan. 3
The remaining cash, less $1.7 million for closing expenses and various loan reserves, adds up to $9.1 million in net proceeds for the company. Crown American president and CEO Mark E. Pasquerilla says the mall refinancing "provides the company with improved financial liquidity as we enter 2002."
The loan carries an initial fixed rate of 7.6% and is interest-only during the first two years, after which it amortizes during the last eight years based on a 28-year schedule with the remaining principal due Feb. 1, 2012.
Opened in 1974, Capital City is located off PA Turnpike Exit 17 on Route 15 and is anchored by department stores including a 120,000-sf Hecht's, a 103,000-sf JC Penney and a 101,000-sf Sears, which occupy an aggregate 324,290 sf. It has 46,158 sf of freestanding retail space and 237,253 sf of small shops. Key tenants include Old navy, Toys R Us, Gap, Limited Too, White Barn Candle and Eddie Bauer. The center was last renovated in 1998. Last year, asking rents at Capital city were $343 per sf.
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