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

Tuesday, 07 November 2017

Former Brixmor Chief Accumulating Neighborhood Shopping Centers

Michael Carroll, the former chief executive of Brixmor Property Group, who last year formed ShopOne Centers REIT Inc., has completed yet another opportunistic investment. His company, backed by Davidson Kempner Capital Management, last month bought Devonshire REIT Inc., giving it 46 retail centers. And since then, it's bought two others. It's taking advantage of a dearth of competition for select retail assets.

Commercial Real Estate Direct Staff Report

Michael Carroll, the former chief executive of Brixmor Property Group, who last year formed ShopOne Centers REIT Inc., has completed yet another opportunistic investment.

His company, which is backed financially by Davidson Kempner Capital Management, bought McKinley Crossroads, with 200,871 square feet in Corona, Calif., in Riverside County, some 50 miles southeast of downtown Los Angeles. It bought the property from Credit Suisse First Boston Mortgage Securities Corp., 2005-C6, which had held a $26.1 million mortgage against it.

The property, at 275 Teller St., faces Riverside Freeway, a busy highway that connects with Interstate 15. It previously was owned by a tenant-in-common group, but got in trouble following the Great Financial Crisis. Unable to invest additional capital for leasing commissions and tenant improvements, the group lost the property to foreclosure three years ago.

ShopOne bought the property for roughly $24.4 million, or $121.50/sf, which Carroll said was "way below replacement cost." The company already has made significant inroads in leasing the property's vacancies, having entered lease negotiations with three tenants that will take a combined 55,000 sf. Tenants include a Simply Fresh Market and 24-Hour Fitness.

That purchase comes on the heels of ShopOne's acquisition earlier this year of Conyers Commons, with 119,362 sf in the Atlanta suburb of Conyers, Ga. That property also was backed by CMBS debt, in this case, a $16 million loan securitized through Credit Suisse Mortgage Securities Corp., 2007-C2. It too had been in special servicing for years, having transferred to Torchlight Loan Services in August 2014. ShopOne paid roughly $14.4 million for the property in May.

Since then, it's invested capital in the 11-year-old property and reworked a number of leases, bringing it to full occupancy. The property is shadow anchored by a Publix grocery store and Target.

ShopOne now owns 48 properties with some 5 million sf. Its first deal was the purchase of Devonshire REIT Inc., a private REIT headquartered in Whitehouse, Ohio.

The company...





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“

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

Top Bookrunners Domestic, Private-Label CMBS - 2016
Investment Bank #Deals Vol$mln MktShr%
JPMorgan Securities 14.94 10,350.16 15.14
Deutsche Bank 14.21 9,926.60 14.52
Wells Fargo Securities 13.36 9,513.96 13.92
Citigroup 10.87 8,061.79 11.80
Goldman Sachs 10.05 7,563.72 11.07

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

Top CMBS Loan Contributors - 2016
Lender #Loans Vol$mln MktShr%
JPMorgan Chase Bank 133.67 8,670.33 13.34
Goldman Sachs 156.20 7,418.37 11.41
Deutsche Bank 178.17 6,510.75 10.02
Citigroup 184.41 5,512.20 8.48
Morgan Stanley 113.18 4,130.53 6.35

 

 

 

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