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Friday, 25 August 2017

CWCapital Tees Up Sale of Moreno Valley Mall in Calif.

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Commercial Real Estate Direct Staff Report

The Moreno Valley Mall, a 1.1 million-square-foot enclosed shopping center in California's Inland Empire, has been put up for sale by CWCapital Asset Management, which took the property by foreclosing against a $76.4 million loan against it.

CWCapital, a Bethesda, Md., special servicer, has hired NKF Capital Markets to sell the property through its RealInsight Marketplace at a Sept. 12 electronic auction.

The property's loan was securitized through Citigroup Commercial Mortgage Trust, 2007-C6. It first had transferred to CWCapital in 2009 as a result of the bankruptcy of its owner, GGP Inc. It transferred again roughly a year later when it was expected to default as cash flow at its collateral, 494,875 sf at the property, fell shy of the amount needed to fully service it. GGP turned the property over to CWCapital in 2011.

The property, at 22500 Town Circle in Moreno Valley, Calif., was appraised at a value of $69 million last April. Given the $7.3 million of net operating income it generates, it very well could sell for a price near that level. A $65 million sales price, for instance, would result in a nearly 9 percent capitalization rate.

The mall actually has seen an improvement in financial metrics during CWCapital's stewardship. For instance, NOI in 2012, a year after GGP gave up on the property, was $5.9 million. Inline sales, meanwhile, have increased annually since 2014 and now stand at $423/sf, up from $410/sf last year. In 2015, they were $378/sf.

The property is anchored by Sears, JCPenney and Macy's, each of which own the space they occupy, as well as Round One Entertainment, which occupies nearly 87,000 sf, and Harkins Theaters, which is in 77,000 sf. An anchor space that had been occupied by Gottschalk's is vacant. Other tenants include Jump'n Jammin, which operates kid-friendly obstacle courses that include foam-ball guns, a rock-climbing wall and crane games, and Crunch Fitness. Soon to open is a Miniso, a Japanese retailer of fashion products.

Servicer notes compiled by Trepp LLC indicate that the property's inline space is 95 percent occupied, but that includes a number of temporary tenants. If those are excluded, occupancy drops to 75 percent.

Because of the lengthy time the CMBS loan has been delinquent and in special servicing, it's accumulated a host of advances, fees and other costs that will result in bondholders getting clipped. Trepp pegs the loan's total exposure at $103.8 million. So if the property sells for $65 million, the CGCMT 2007-C6 deal could face nearly $40 million of losses.

The CMBS transaction has 40 of its original 322 loans remaining in its collateral pool. And its balance has whittled down to $600 million from an original $4.8 billion. The Moreno Valley Mall is the largest asset in the deal's collateral pool. And every other loan, save for three, is now past due.

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



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Additional Info

  • Syndicate to Realpoint: No
  • States: California
  • Sector: Retail
  • Subject: Property Offerings (OFF)
  • Deal Name: Citigroup Commercial Mortgage Trust, 2007-C6
  • Private: No
  • bloombergDealName: CGCMT 2007-C6
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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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