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Wednesday, 06 February 2019

Iowa Mall Offered for Sale, Setting Stage for Resolution of Long-Troubled CMBS Loan

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Commercial Real Estate Direct Staff Report

The Westland Mall in West Burlington, Iowa, is being offered for sale, a move that will ultimately result in the resolution of a long-troubled $15.5 million CMBS loan.

The loan, securitized through Wachovia Bank Commercial Mortgage Trust, 2005-C17, is one of only seven remaining in the deal's collateral pool, which has a combined balance of $32.7 million. At issuance, the deal had 227 loans in its collateral pool and a balance of $2.7 billion. It so far has suffered $69.3 million of losses, or 2.5 percent of the original balance.

While the loan is listed as still in foreclosure, a foreclosure auction was held late last year. As such, CWCapital Asset Management is offering the property, indicating that it will get title to it before it takes offers. It's hired NKF Capital Markets to market the property to prospective investors, who will submit bids at an online auction on its RealInsight Marketplace platform starting on March 4.

The property, with a total of 372,974 square feet, is only 31 percent occupied and was appraised last October at a value of only $1.5 million. The mall was constructed in 1977 on a 42-acre site that includes surface parking for 2,120 vehicles. It was renovated in 2013.

It had been anchored by a 92,000-sf JCPenney store, which vacated the property in April 2015, after a five-year period during which sales plunged by nearly one-third, and two Younkers stores, which vacated as well, when parent Bon-Ton Stores filed for bankruptcy last year. Younkers had occupied space at the mall since construction. Inline sales were $236/sf during the 12 months through the end of last September.

The loan's troubles well precede the major tenant departures. It transferred to special servicing in 2013 because it was expected to default as rents the property was collecting were lower than had been anticipated. It was modified into a $12.1 million A-note and $6.4 million B-note and its term was extended by three years to January 2018.

Westland Mall Partners, the group that owned the property, had injected $1.4 million of fresh equity to win the modification. That, along with certain reserves, was used to help reduce the A-note's balance to its current $9.1 million.

Remaining anchors at the property are Marshalls, Shoe Carnival and CEC Theaters, which owns the space it occupies.

In marketing material, NKF said the property, which sits at the confluence of U.S. 34 and 61, was the only enclosed regional mall within an 80-mile radius.

Comments? E-mail Orest Mandzy, or call him at (267) 327-4281.



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Additional Info

  • Syndicate to Realpoint: No
  • Cities: Burlington
  • States: Iowa
  • Sector: Retail
  • Deal Name: Wachovia Bank Commercial Mortgage Trust, 2005-C17
  • Valuation: Between $10 million and $25 million
  • Private: No
  • bloombergDealName: WBCMT 2005-C17
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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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

 

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CMBS 2.0 Spreads

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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

 

 

 

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