MILWAUKEE—Today's historically low interest rates have made the prospect of refinancing loans quite attractive for many businesses. And some top lenders are also willing to look for opportunities with businesses that usually don't hit their radar screens.
Walker & Dunlop, Inc., a Bethesda, MD-based real estate finance firm, for example, just originated two loans with 10-year terms and totaling $6,900,000 for New Land Enterprises' Fox Bay Cinema Grill and the Oriental Theater in Milwaukee, WI. The loan was provided by Philadelphia-based RAIT Financial Trust. But Rob Meister, vice president of Walker & Dunlop in Milwaukee, tells GlobeSt.com that movie theaters usually secure such deals from local banks, rather than institutional lenders like RAIT.
“It's generally a concern with the industry as a whole,” he says. “Netflix isn't going away,” and that causes many institutional lenders to worry that consumers won't keep paying money to go out to a theater. However, in both of these cases, the theaters merely anchor mixed-use properties, each of which has a diverse set of tenants. Furthermore, the theaters have special features unknown in cookie-cutter multiplexes.
Fox Bay Cinema Grill is a 48,391-square-foot independent movie theater that offers patrons a “dinner and a movie" experience by serving guests a meal while they watch a movie. Guests can also enjoy beverages, popcorn, and candy in the lounge area. In addition, the location has a Starbucks and on the upper floors a set of class B offices.
A Milwaukee landmark, the Oriental Theater has been operating continuously since 1927. Now part of the Landmark Theater group, the Oriental shows independent films while offering consumers a variety of amenities including digital projection, concessions, DVD's, and books. In addition, a bowling alley and a bar occupy the property's basement. “It's an old-school, traditional theater,” Meister adds. “It's the kind of place you can go to and consider it an event.”
"Financing assets with independent theaters as anchor tenants is challenging, however, RAIT Financial Trust really dug into this opportunity and realized the perceived risk wasn't reality,” he says. “These were solid assets located in strong in-fill locations."
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
