“We believed that these were quality properties when we purchased the original loan participation, and this new joint venture agreement reaffirms that we still believe in them,” Podboy notes.

Specifically, Inland American bought into $141 million of the $424 million loan in 2008. The entire loan, which was scheduled to mature this week, was paid off when the two firms formed the JV.

“Centro’s issues have been widely reported, and when we initially purchased the participation, we saw it as an opportunity to be associated with the collateral, which we liked,” Podboy explains. “When we looked at the loan maturity, there were a number of options available to Centro including the JV. We decided that a joint venture would be the best option.”

Goldman Sachs and J.P. Morgan provided the 10-year CMBS financing. “It’s still hard to get a loan of this size from a balance sheet lender, but this deal is emblematic of the fact that the CMBS market is coming back, which allows for a more orderly market where real estate sponsors can continue to hold on to their properties and existing lenders can to be paid off,” Podboy notes. “There will probably be more bonds being floating in the first quarter than have been floated in a long time.”

Centro will continue to manage the properties on a daily basis, but the JV provides both Inland American and Centro with major decision rights, according to Podboy. The deal, which does not have a specific end-date, also allows the partners to exit the deal before the CMBS financing matures.