(RealShare New Jersey convenes at the Hyatt Regency, New Brunswick, NJ, September 19.)
PHILADELPHIA-Pennsylvania Real Estate Investment Trust has obtained three mortgage refinance loans totaling $402 million for shopping centers it owns, with a new average interest rate of 4.06%. The new loans replaced mortgage loan balances of $316.7 million carrying an average interest rate of 5.3%, generating proceeds of $85.3 million. The loans were provided for Cherry Hill Mall in Cherry Hill, NJ; Cumberland Mall in Vineland, NJ; and the Christiana Center in Newark, DE.
Cherry Hill is a 1.3-million-square-foot “super-regional” mall with sales per-square-foot of $630, according to second-quarter reports. The mall, anchored by Nordstrom, Macy’s and J.C. Penney and home to numerous fine restaurants, was redeveloped and renovated in 2009. Cumberland Mall in Vineland is a 944,000-square-foot regional mall anchored by J.C. Penney, Boscov’s and Burlington Coat Factory, with reported sales per square foot of $324. Christiana Center is a 303,000-square-foot power center anchored by Costco and Dick’s Sporting Goods.
The previous loans for Cherry Hill and Cumberland Mall were older and carried the highest interest rates – 5.44 % on a loan of $231 million for Cherry Hill, and 6.42 % on $41.1 million for Vineland. “We are pleased with the company’s continued ability to access attractive financing terms on properties across the portfolio,” says Andrew Ioannou, a senior-vice-president of PREIT. “We have now addressed all of the company’s debt maturities through June 2013 and have created a reduced base of long-term, fixed-rate interest costs from which to grow earnings.”
The company has completed $495.8 million of property-level financings to date this year, generating net proceeds of $102.9 million and a reduction in average interest rate of 129 basis points, from 5.54% to 4.25%. With the refinancings, the weighted average maturity for PREIT’s mortgage loans increased to 5.4 years from 3.4 years.
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