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Monday, 30 July 2018

St. Louis-Area Mall Sells for $13Mln; CMBS Deal to Take Big Hit

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Commercial Real Estate Direct Staff Report

Hull Property Group paid $13 million for the Chesterfield Mall, a troubled 1.3 million-square-foot shopping center in suburban St. Louis.

The Augusta, Ga., retail-property specialist, a regular buyer of distressed malls backing CMBS debt, bought the property from LB-UBS Commercial Mortgage Trust, 2006-C6, which had held a $140 million loan against 641,800 sf of the property's space. Dillard's owns its anchor space, which has been closed for nearly two years, as does Macy's, while the property's 170,000-sf Sears space is owned by Staenberg Group of Overland, Mo., which had acquired it earlier this year in an effort to take over the entire property. The Sears store remains open and in operation.

The property in Chesterfield, Mo., was constructed in 1976 and had been owned by Westfield Group until 2007, when CBL & Associates Properties Inc. bought a stake in it. Soon after, it bought out Westfield's stake. At the time, it carried the asset on its books at a value of $293.2 million.

The property had generated $15.9 million of net operating income in 2008, but that's been declining ever since. Last year, with the property 90 percent occupied, NOI was $4.9 million, according to servicer data compiled by Trepp LLC. In 2016, CBL started evaluating alternatives, including redevelopment, for the property, which had been hammered by a glut of competition in the area.

The loan, commonly referred to as Westfield Chesterfield, transferred to special servicer C-III Asset Management in March 2016 as its maturity was nearing. Last year, the property's appraised value plunged to $30.2 million. It fell further, to $12.4 million, late last year.

The property's occupancy, meanwhile, has continued to suffer. Servicer notes compiled by Trepp indicate that large numbers of tenants are either looking to vacate or renegotiate their leases so they'd pay a percentage of sales as opposed to a fixed monthly amount. Occupancy is less than 80 percent.

C-III, which had installed Madison Marquette to oversee leasing and management, sold the property through NAI Global. Hull's other acquisitions from CMBS trusts include the Hudson Valley Mall in Kingston, N.Y., the Fairgrounds Square Mall in Reading, Pa., and the Richmond Square Mall in Richmond, Ind. It is expected to try redeveloping the Richmond property, but that would require cooperation from Dillard's, Macy's and the Staenberg Group as well as a possible re-zoning.

The loan's total exposure was $152.3 million, so the property's $13 million sale could result in it suffering a complete loss. The CMBS transaction, meanwhile, already has suffered $280.3 million of losses, or 9 percent of its original balance. It has accumulated $18.3 million of interest shortfalls.

The loan was one of five left in the collateral pool for the LBUBS 2006-C6 deal, whose remaining balance is $255.9 million, including the Chesterfield loan. The biggest other loan, with a balance of $69.2 million, also is backed by a CBL-owned shopping center, the Greenbrier Mall in Chesapeake, Va., which was modified last year. The loan's coupon was cut to 5 percent from 5.91 percent and its term was extended through December 2019 and could be extended for another year.

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



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Additional Info

  • Syndicate to Realpoint: No
  • Cities: St. Louis
  • States: Missouri
  • Sector: Retail
  • Subject: Commercial MBS (CMBS), Property Acquisitions (ACQ)
  • Deal Name: LB-UBS Commercial Mortgage Trust, 2006-C6
  • Valuation: Between $10 million and $25 million
  • Private: No
  • bloombergDealName: LBUBS 2006-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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