SCOTTSDALE, AZ-Glimcher Realty Trust has obtained a $70 million permanent loan from German American Capital Corp. to finance a land acquisition associated with its Scottsdale Quarter mixed-use project.
The loan facilitated Glimcher’s acquisition of the land under Phases I and II of Scottsdale Quarter and allowed the REIT to consolidate the leasehold and fee positions. According to Glimcher’s financial filings, the REIT purchased the fee simple interest to roughly 14.5 acres from Sucia Scottsdale LLC for $96 million.
Arranged by George Smith Partners, the five-year, non-recourse loan has a rate of 4.91% percent. The conduit loan is collateralized by the ground lease on the 600,000-square-foot Scottsdale Quarter, according to Gary Mozer, principal and managing director of George Smith Partners. He arranged the loan, along with Josh Roseman, Steve Orchard and Scott Swisher, also of George Smith Partners.
“Glimcher wanted maximum loan dollars at the lowest rate, along with certainty of execution” Mozer tells GlobeSt. “We had a lot of interest in this loan because it’s very low risk, but people priced that risk differently. The issue was the combination of dollars and rate. This lender and loan met the criteria.”
This loan illustrates the fact that lenders are beginning to price risk properly, Mozer contends. “For the past two year, lenders didn’t know how to price risk,” he says. “This is a low risk loan, and this lender was willing to price it appropriately.”
Glimcher is under contract to purchase the land for all three phases of the Scottsdale Quarter development for $120 million. Scottsdale Quarter includes approximately 600,000 square feet of premium retail and office space. Phase I opened in 2009, and Phase II scheduled to come on line in the fall of 2010.
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