Big V acquired the three shopping centers spanning 457,695 square feet for $24 million—or $52 per square foot—from Ziff Properties. The portfolio includes Village at Myrtle Grove, a 74,370-square-foot community shopping center located in Wilmington, NC; Lancer Center, a 180,194-square-foot community shopping center located in Lancaster, SC; and Lanier Plaza, a 203,876-square-foot grocery-anchored community shopping center located in Brunswick, GA.

“The portfolio represents an intriguing value-add investment opportunity to pick up high-quality, well-located assets with strong cash flow at a low cost basis,” says Lipkin. “There is significant value creation available through further leasing at the centers.”

To facilitate the floating rate financing, Lipkin educated the borrower about the potential cost savings and other benefits of floating rate debt over fixed-rate debt, including the efficient ways to hedge against an increase in LIBOR with interest rate caps at a minimal cost. Interest rate exposure can be a critical component of the success of a project, according to Lipkin. Interest rate caps can provide multiple advantages over other hedges, like rate swaps, including no prepayment penalties and minimal transaction costs.

“Value-add borrowers can end up breathing a deep sigh of relief knowing they didn't pay to lock in a fixed-rate loan at a spread of 100 basis points or more,” says Lipkin said. “The interest savings can be huge over a 3-to-5 year period.”

ATLANTA—Southeast retail properties are winning some creative financing deals. Grandbridge Real Estate Capital has secured three loans totaling $18.75 million for a New York investor's retail acquisitions in the region.

Adam Lipkin, vice president of Grandbridge's Miami team, arranged the loans. Big V Capital, a vertically integrated real estate investment and property management company that specializes in buying and managing neighborhood and community shopping centers throughout the Southeast, borrowed the funds.

“When it comes to capital sources, many real estate operators have only a handful of relationships and often do most of their business with a few banks,” Lipkin tells GlobeSt.com. “These groups gain tremendous value when they expand their capital relationships with new sources for debt and equity that can provide non-recourse financing, more favorable terms and lower rates. Creative financing solutions result in cost savings and added value for their investments.”

Here's the backstory: Grandbridge placed the loans with a major regional bank. The five-year loans have floating rates of under 3% with two years interest-only, followed by a 25-year amortization schedule.

Big V acquired the three shopping centers spanning 457,695 square feet for $24 million—or $52 per square foot—from Ziff Properties. The portfolio includes Village at Myrtle Grove, a 74,370-square-foot community shopping center located in Wilmington, NC; Lancer Center, a 180,194-square-foot community shopping center located in Lancaster, SC; and Lanier Plaza, a 203,876-square-foot grocery-anchored community shopping center located in Brunswick, GA.

“The portfolio represents an intriguing value-add investment opportunity to pick up high-quality, well-located assets with strong cash flow at a low cost basis,” says Lipkin. “There is significant value creation available through further leasing at the centers.”

To facilitate the floating rate financing, Lipkin educated the borrower about the potential cost savings and other benefits of floating rate debt over fixed-rate debt, including the efficient ways to hedge against an increase in LIBOR with interest rate caps at a minimal cost. Interest rate exposure can be a critical component of the success of a project, according to Lipkin. Interest rate caps can provide multiple advantages over other hedges, like rate swaps, including no prepayment penalties and minimal transaction costs.

“Value-add borrowers can end up breathing a deep sigh of relief knowing they didn't pay to lock in a fixed-rate loan at a spread of 100 basis points or more,” says Lipkin said. “The interest savings can be huge over a 3-to-5 year period.”