Abbey Nails Down $229M Bridge Funding on Retail Portfolio

Represented by law firm Sklar Kirsh, the company recapitalized a 27-property portfolio in California. The assets total 2.1 million square feet of space scattered across Los Angeles, Orange, Riverside, San Bernardino, Fresno and Kern counties.

Palmdale Place Shopping Center
Palmdale Place Shopping Center

The Abbey Co., a privately held CRE investment and management firm based in Garden Grove, Calif., has received $229.3 million in bridge financing from Citi Real Estate Lending and Barclays Bank to recapitalize a 27-property California retail portfolio, according to Los Angeles–based law firm Sklar Kirsh, which represented Abbey in the transaction.

The assets securing the loan total about 2.1 million square feet of space and are in Los Angeles, Orange, Riverside, San Bernardino, Fresno and Kern counties. The loan proceeds were used in part to refinance the outstanding principal balance of a previous $309 million bridge loan from an affiliate of Prime Finance.

This was a very complex loan with a lot of moving parts,” Mark Nicoletti, partner in Sklar Kirsh’s Real Estate Finance Group and lead counsel on the financing, said in a prepared statement. “There are quite a number of issues to contend with when negotiating a loan of this size with so many properties in the collateral pool, but we were able to work with lender’s counsel to address the issues quickly and to the satisfaction of all parties.”

This was a great transaction for our client, especially given where interest rates are heading,” added Andrew Kirsh, co-founding partner & chair of the firm’s real estate practice. “We are extremely pleased to have closed when we did.”

The Abbey Co. declined to provide additional information requested by Commercial Property Executive.

Other members of the Sklar Kirsh legal team included Serineh Baghdasarian and William Walker.

Inland Empire’s trend toward newer space

Retail space in the Inland Empire was bifurcating at the end of the year, with properties built since 2010 commanding higher rents and enjoying lower vacancies than the overall market, according to a Q4 2017 report from NAI Capital.

Asking rents for these newer buildings average $2.20 per square foot NNN, versus an average of $1.39 for the region overall. Similarly, vacancies averaged just 5.3 percent, while the Inland Empire overall saw vacancies about 130 basis points higher.

Of the more than 1.2 million square feet of retail space under construction at year-end, about 68 percent was preleased or expected to be occupied on delivery.

Image courtesy of The Abbey Co.