$135M Financing Secured for 1MSF Yonkers Shopping Center
- Oct 23, 2009
By: Barbra Murray, Contributing Editor
It’s almost like the good old days of 2007 when loans over $100 million for commercial real estate practically rained from the sky. Undeniably, those times have not returned, but news that Brooks Shopping Center L.L.C., owner of the 1 million square-foot Cross County Shopping Center in Yonkers, N.Y., has gotten its hands on a $135 million first mortgage to finance the property’s redevelopment certainly brings back good memories.
Acting on behalf of Brooks Shopping Center L.L.C., of which leading private real estate development and investment firm Benenson Capital Co. is a managing member, Estreich & Company Inc. orchestrated the five-year fixed-rate loan that was provided by Prudential and New York Life. Goldfarb & Fleece represented the borrower in the transaction.
The financing partially covers the total $225 million cost of the Cross County redevelopment project. Located just off I-87 near the intersection of Central Park Avenue and Cross County Parkway West, the behemoth shopping center first opened its doors in 1954. Today it features approximately 960,000 square feet of retail space and an eight-story, 60,000-square-foot office building. Upon completion of the massive overhaul, Cross County’s retail space will have expanded by approximately 245,000 square feet, and the property’s office building will have been replaced with a new 150-room hotel with meeting space and ground-level retail. Santa Monica, Calif.-based shopping mall owner and operator Macerich Co. has been charged with overseeing the redevelopment endeavor.
“The high quality of the asset, coupled with a strong sponsorship made this financing deal possible even in a very challenging environment,” Richard A. Kessler, Chief Operating Officer of Benenson Capital Partners, said in a prepared statement. Indeed, the environment is very challenging. According to a recent report by global real estate investment management firm CBRE Investors, commercial mortgage loan originations in the second quarter of this year were down 54 percent from the second quarter of 2008. However, the grim number still marks a bit of an improvement from the first quarter of 2009 when origination volumes were down 70 percent from the first quarter of 2008.
Although there is a slight hint of the beginning of a credit market defrosting, securing a real estate loan over $100 million is still quite a feat. Among the successful few is shopping center REIT Developers Diversified, which announced earlier this month that it had obtained new first mortgage financing in the form of a $400 million, five-year secured loan from a Goldman, Sachs & Co. affiliate. And in August real estate services firm Holliday Fenoglio Fowler L.P. reported that it had facilitated a $139 million loan on a four-property, 867,000-square-foot retail portfolio in Northern Virginia. The owner of the grocery-anchored centers, Federal Realty Investment Trust, walked away with a five-year fixed-rate loan from Prudential Financial Inc.