La Alameda Shopping Center
$40MM Refinance of a Multi-Tenant Shopping Center
Kostas Kavayiotidis, Mike Davis, and Jacob Lee of PSRS arranged the $40MM refinance of a multi-tenant shopping center in Los Angeles, California. The subject property is a 2008 built, multi-tenant retail center, that consists of six, 1 & 2-story building clusters, containing 244, 554 square feet of space (226,826 sq ft. of retail and 17,728 sq ft. of office). The 18.3-acre development features Spanish architecture inspired by the area’s culture and history of commerce, serving as a community gathering place for families and shoppers. Features of this shopping center include pedestrian-friendly courtyards, plaza spaces, outdoor seating, and a fountain. Funded with CMBS execution, PSRS was able to secure for their borrower a non-recourse loan with 10 years of interest-only payments.
Retail, as an asset class, is in a difficult place due to COVID-19 mandated closures in CA and other areas. Unless the tenants were drug, grocery, or other retail uses deemed essential by the health department, many were required to close for weeks or months on end. What was once “two weeks to flatten the curve” and not overwhelm our hospital system became a patchwork response by the government to contain a virus many were unsure of how it was transmitted. Restaurants, spas, soft-goods retailers all came into the frame as possible vectors for infection, and the entire retail real estate market was sent into a tailspin. As with many centers, temporary blanket closures affected the La Alameda shopping center. Primestor worked diligently hand in hand with its tenants to support their businesses through the pandemic and maintaining the center by increasing security through the turbulent summer. They were highly successful in keeping the center well occupied into 2021, but the uncertainties remained in the CRE financing markets. PSRS identified a lending source to offer competitive terms in this difficult climate. We worked with them to overcome a complicated capital stack and entity structure and, ultimately, to close in time to pay off a maturing loan.