Stadium Crossing Assets

Transaction description

Jason Roth, Vice President at PSRS, recently arranged $6.56M in financing for two assets in Anaheim, CA. The two assets are part of Stadium Crossing, a mixed-use center that sits next to Angels Stadium.

The first asset was 2095 E Katella Avenue, an approximately 35,000 RSF office building that is fully leased to the Saddleback Church on a long-term basis. Led by Reverend Rick Warren, the Saddleback Church is a for-profit entity with over 14 locations globally. PSRS was able to secure a $3.47 M loan from Standard Insurance for this asset.

The second asset was Stadium Plaza, located at 2035-2085 E Katella Avenue and is a multi-tenant retail center, housing tenants like Dunkin Brands, Starbucks, and Panda Express. Chipotle has also committed to a long-term lease at Stadium Plaza and is anticipated to take occupancy in the summer of 2020. PSRS was able to secure a $3.10 M loan from Farm Bureau on this asset.

Jason Roth was able to leverage his prior experience as a leasing broker and acquisitions analyst to help the client navigate numerous challenges throughout the transaction which included:

Tenant Default: During the process of the acquisition of the retail center, one of the long-time tenants went dark which not only jeopardized the entire sale of the asset but also the financing terms that would be available for a property. In collaboration with local leasing brokers, Jason and his client were able to secure an LOI from Chipotle within 48 hours of the current tenant’s default at rents that were significantly higher than the existing tenant. He was also able to ensure that the lenders recognized this future income in their valuation of the property, thus improving the financing terms they were offering.

1031 Exchange: The assets were bought through a 1031 Exchange which required our client to close their acquisition 180 days after identifying the property in order to avoid $7.26M in extra taxes. Therefore, PSRS had to proactively work with both lenders and third parties to ensure the transactions would close in a tight timeframe.

COVID-19: The global COVID-19 pandemic and the local quarantine orders that proceeded it took place while the loan was in closing. PSRS and their partners were able to close the loan 48 hours prior to the Orange County recorders’ office shutting down.

“I have worked on a number of different transactions over the course of my career and this one was the most personally rewarding because it forced the PSRS team and our collaborating partners to think outside the box to overcome unforeseen obstacles. I was able to leverage my experience in various real estate disciplines to help execute what will be a life-changing deal for my client.” – Jason Roth