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Monday, 16 September 2019

$278.2Mln CMBS Loan Against Former Franklin Mills Mall Gets Modified Again

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Commercial Real Estate Direct Staff Report

The $278.2 million CMBS loan against what is now called the Philadelphia Mills shopping center in Philadelphia, which had transferred to special servicing in March, has been modified once again.

The loan, which originally had matured in 2017 and seven years ago was extended through this June, has been extended by another five years to June 1, 2024. That was expected as the property's owner, Simon Property Group, had indicated it was in talks to extend the loan. Meanwhile, all excess cash flow generated by the collateral property will be used to pay down the A-note's principal, which has been reduced to $180.5 million as part of the latest modification.

Last year, the property was on track to generate $16.8 million of net cash flow, according to servicer data compiled by Trepp LLC. That was 56 percent more than needed to service the property's interest-only A-note, which pays a coupon of 5.65 percent.

Extending the loan's term gives the two CMBS trusts that hold the loan a shot at generating what could be $6.5 million of annual cash flow from the property. The alternative: taking the property through foreclosure and selling it - it was appraised last April at a value of as little as $112.8 million.

The loan is split into a $162.3 million piece that's in JPMorgan Chase Commercial Mortgage Securities, 2007-LDP11, and a $108.2 million piece in GS Mortgage Securities Corp., 2007-GG10.

When it was modified in 2012, the loan was divided into a $200 million A-note, with the JPMCC 2007-LDP11 deal holding a $120 million piece and the GSMS 2007-GG10 holding the remaining $80 million piece. The A-note since has paid down, using proceeds of the sale of a vacant anchor space to Walmart. Meanwhile, the property's owner had ponied up $15 million into a tenant improvement reserve account. That account now has $11.6 million.

The loan encumbers 1.3 million square feet at the 1.8 million-sf shopping center, which is 79.9 percent occupied. That means a total of 280,089 sf is vacant, including two junior anchor spaces that had been occupied by Bed Bath & Beyond, as well as a skate park and 35 inline stores.

Simon five years ago launched a massive renovation of the property at an estimated $30 million cost. A number of new tenants were brought in, including Express Factory Outlet Store, Steve Madden, Samsonite and Rack Room Shoes. Other tenants, including Marshall's/Home Goods, Saks Off 5th and H&M, renovated their locations.

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


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Additional Info

  • Syndicate to Realpoint: No
  • Cities: Philadelphia
  • States: Pennsylvania
  • Sector: Retail
  • Subject: Commercial MBS (CMBS)
  • Deal Name: GS Mortgage Securities Corp. II, 2007-GG10, JPMorgan Chase Commercial Mortgage Securities Corp., 2007-LDP11
  • Valuation: More than $150 million
  • Private: No
  • bloombergDealName: JPMCC 2007-LD11, GSMS 2007-GG10
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Data Digest







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




cppichart FP



CMBS 2.0 Spreads


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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