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SEDONA, AZ-A major real estate owner has refinanced two of his retail centers in the Oak Creek part of the city.
Al Spector has secured nearly $25 million from JPMorgan Mortgage Capital by refinancing Sinagua Plaza, a 29,989-sf shopping center, and the adjacent Canyon Portal Retail Center, a 48,500-sf, mixed-use development. The upscale centers along Highway 89A are roughly 15 years old. The loans were arranged by Craig Johnson, executive vice president and COO of Chicago-based Aries Capital.
"Most of the lenders had trouble with the fact that [the assets were] retail in a tertiary market that is a tourist town," Johnson tells GlobeSt.com. He says many lenders also were uncomfortable because the centers did not have any major anchor tenants. "We needed a lender with a little bit of understanding and JPMorgan was willing to step up."
Spector wanted to replace the loan on Sinagua Plaza for several reasons. Johnson says its existing loan had a high interest rate and Spector wanted one with a longer term and non-recourse. Moreover, he wanted to pull some cash out of the asset.
Situated at 320 Highway 89A, the 2.3-acre Sinagua Plaza collateralized an $8.2-million loan with a seven-year term at 5.9% fixed-rate interest. The loan has a 30-year amortization. The loan-to-value ratio was 68% of the appraised value yet the financing per sf still exceeded $270 per sf. The 95%-leased Sinagua Plaza has 21 distinctive Southwest tenants including Joe Wilcox Western Wear, Turquoise Buffalo and Amara Cantina.
Spector's goals for refinancing Canyon Portal Retail Center were completely different than those for Sinagua Plaza, Johnson says. "He wanted a short-term interim loan because the rents are ramping up," he explains, "and he has a couple of rollovers that will push the value of the center." Spector secured a $16.5-million loan in a two-year, interest-only package with 4.75% interest rate.
Situated on a 3.3-acre bluff at 270-280 Highway 89A overlooking Oak Creek, Canyon Portal Retail Center includes a hotel property. It consists of 25,000 sf of high-end retail space and 40 newly renovated hotel rooms that are contracted under a 20-year master lease with IXL Resorts Inc. of Phoenix. The center is fully leased.
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