Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Error
  • JUser: :_load: Unable to load user with ID: 65
Wednesday, 14 April 2010

College Buys Martinsburg Mall; Purchase of 3 Other Lightstone Malls Nixed

Written by 
Rate this item
(0 votes)

Commercial Real Estate Direct Staff Report

The Martinsburg Mall, one of four shopping centers owned by Lightstone Group that have been delinquent on their $91.4 million of debt for 18 months, has been sold.

But the prospective buyer for the remaining three properties has backed out of its proposed $21.3 million purchase.

Mountain State University paid $11 million for the Martinsburg property, which has 552,212 square feet in Martinsburg, W.Va., where the college operates a campus in a former 45,000-sf outlet center that it bought in 1999. It said it will continue to run the property as a shopping mall, but would use about 45,000 sf of its space for a university learning center that it would develop in space next to one of the property's anchor stores.

The property's outparcels could eventually be developed into student housing and athletic fields.

The property, along with the 507,836-sf Shenango Valley Mall in Hermitage, Pa.; the 476,778-sf Mount Berry Square Mall in Rome, Ga., and Bradley Square Mall, with 406,845 sf in Cleveland, Tenn., collateralized $73.2 million of debt that was securitized through JPMorgan Chase Commercial Mortgage Securities Trust, 2006-CIBC15. They also were encumbered by another $18.2 million of mezzanine and secondary debt.

Lightstone had acquired the four properties, along with the West Manchester Mall in York, Pa., in 2004 from Pennsylvania REIT for $110.7 million. The properties defaulted on their debt in September 2008 and Lightstone offered to turn them over to JER Partners, the CMBS deal's special servicer, in a deed-in-lieu of foreclosure.

In order to make the properties attractive to investors, JER pushed them into receivership, allowing it to offer them for sale with assumable financing. Jones Lang LaSalle was tapped as receiver and last year launched a marketing campaign.

Evidently, it had struck a preliminary agreement to sell the Shenango Valley, Mount Berry and Bradley Square properties to Morrison Group for $21.3 million, with 20 percent of that in cash and the rest in assumed debt, according to an earlier report from the trustee for the CMBS deal that owns the debt. But, according to the trustee's most recent report, the prospective investor, which could not be reached, tried to lower its proposed purchase price. JER balked and the deal was killed.

Even if another investor steps in at near the price Morrison was to purchase the three properties, the CMBS deal will take a substantial hit.

According to analysis by Realpoint, the loan already has been assessed an appraisal reduction of $15.5 million. It estimated that the loan's resolution would result in a loss of roughly $36 million. That will likely increase as a result of the Martinsburg property's sale.

That loss alone would wipe out the deal's unrated class, which last month had a balance of $26.8 million and nearly wiped out the two more senior classes, which originally were rated B- and B, respectively. That would leave a balance of only about $21.6 million in the deal's B-piece. When that gets eaten away, JER could lose its special servicing rights.

And that could happen eventually.

Another $280 million of loans in the deal's collateral pool are in special servicing. Realpoint expects the CMBS transaction to ultimately suffer losses that would eat away at all the classes subordinate to the class originally rated A- and A3 by Fitch and Moody's, respectively.

Comments? E-mail Orest Mandzy or call him at (267) 247-0112, Ext. 211.



Copyright 2010 Commercial Real Estate Direct www.crenews.com

weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Additional Info

  • Syndicate to Realpoint: No
  • States: West Virginia
  • Sector: Retail
  • Subject: Property Acquisitions (ACQ)
  • Deal Name: Wachovia Bank Commercial Mortgage Trust, 2007-C34
Read 517 times

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
warehouse-backstage