Slated for completion before the end of 2008, the expansion is being funded with a $57.75-million construction loan from Key Bank National Association that was sourced by the Los Angeles office of HFF. The two-year loan has a loan-to-cost ratio of approximately 75%.
The loan was arranged by HFF executive managing director Scott McMullin and associate director John Crump. Crump tells GlobeSt.com that the loan was closed without the anchor tenant in place but the terms were contingent upon a signed lease, which is now in place. "They received a lower (interest) rate (because of the Hard Rock)," Crump says.
The three-quarter-acre development site is located at 3771 Las Vegas Blvd., adjacent to the existing Showcase Mall in front of the MGM Grand Hotel & Casino, and directly across from MGM Mirage's $5.4-billion CityCenter development. The Showcase Mall expansion will include three stories of retail space with a glass curtain wall fronting the Strip.
In addition to Hard Rock, tenants will include ABC Stores and Denny's, which previously had a location on the property and exchanged its long-term lease there for a space in the expansion. Tenants at the existing Showcase Mall include Coca Cola, M & M's, United Artists Theaters, adidas and Gameworks.
City Center Retail acquired Showcase Mall and the expansion parcel in early 2005 for $142 million. JP Morgan Chase provided $92 million in permanent financing for the mall. Nevada State Bank provided acquisition financing for the adjacent parcel. At the time, expansion plans called for a residential-over-retail development, but the market for condominiums has since waned, prompting the pure retail development.
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