Eli Gershenson, director of Dallas-based Quantum First Capital LP, says the package took 90 days to pull together because the borrower of record, Westdale Northlake Ltd., wanted the new loan to kick in when the CMBS note, bearing a 4.8% fixed rate, expired for the 10233 E. Northwest Hwy property. "We could have closed it sooner if he'd wanted," Gershenson says.
Northlake's owner secured a three-year, Libor-based loan from Washington Mutual Bank, one of four lenders looking at the deal for the 80%-leased shopping center, according to Gershenson who partnered with Quantum president Stuart Wernick to arrange the new debt. WaMu's interest rate and maximum proceeds earned the nod, Gershenson says, adding the deal enabled the borrower to monetize additional equity derived from a renovation.
Gershenson says the deal swung to short-term note and a Libor rate instead of a fixed rate because occupancy is 80%. "The current occupancy of the center limited us to a shorter term," he tells GlobeSt.com. "In the environment we're in right now, we ended up going to a shorter term deal."
The borrower of record acquired the shopping center in 2003 from Westdale Properties America I Ltd. of Dallas, using a Quantum-arranged loan for $3.9 million to make the close. The 1960s-era asset, positioned on 8.5 acres, was overhauled in 2001, including a re-skinning and demo of 20,000 sf of inline space. An office building was razed and a 60,000-sf Albertson's with a fueling station brought on line. Northlake's tenant roster includes Tuesday Morning, Dollar Tree and a US Post Office plus sundry other retailers and medical services.
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