BELLEVUE, WA-New York City-based Joseph Merrill Capital, a real estate investment banking firm, has structured a seven-year CMBS loan of $55-million for RP Realty Partner’s Bellevue Galleria. The Galleria is a class-A mixed-use office and retail asset consisting of more than 203,000 rentable square feet.
James Rizzi, managing principal of JMC, tells GlobeSt.com that the company is encouraged by the continued loosening seen in the securitization market. “The property was well positioned for long term fixed rate financing given RP Realty Partners successful repositioning of the property, which involved converting the previously existing Cinema into class-A office space and increasing the overall rentable square footage of the property,” Rizzi said.
Rizzi adds that the asset is “high quality,” and was “appropriately repositioned by a high-quality sponsor.” JMC structured the loan with the Royal Bank of Scotland that used its balance sheet to warehouse the loan until its larger securitized pool goes to market for execution in the coming months.
RP Realty Partners, owner of the Galleria, is experienced in implementing complicated repositioning strategies involving retail and mixed-use properties of 100,000 square feet to 600,000 square feet, according to a prepared statement. In the case of the Galleria, RP sought a change in zoning to convert the previously existing movie theater space into office space, which added 18,000 rentable square feet to the property for a combined 84,000 square feet of office space and enhanced the property’s overall net operating income, according to Rizzi.
The attractive interest rate environment coupled with the return of the CMBS market will continue to have a positive impact on the ability for property owners to execute their business plans and prepare certain assets for sale back into the market, according to JMC. “We are in a great position to help our clients capitalize on the low interest rate environment and remain committed on bringing measureable value to the refinance, acquisition, and recapitalization process,” Rizzi explains.
As lenders continue to become more aggressive in their underwriting criteria and as long as interest rates remain low, transaction volume will continue to increase dramatically to bring a much needed clarity to a marketplace where it has been challenging to determine true market valuations and fitting asset strategies, Rizzi says.
The Galleria is 96% occupied with a diverse mix of tenants including the Men’s Warehouse, Gene Juarez Salons, Microsoft, and LA Fitness.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
