East End Capital Transforms Warehouse into Wynwood Retail Attraction.

Media Contact: Amanda Ferraro Beckerman



Mission Capital Secures $10.5M Loan for

East End Capital’s Wynwood Arcade in Miami’s Hottest Neighborhood

East End Capital Transforms Warehouse

into Wynwood Retail Attraction

MIAMI, Fla. (July XX, 2016) —Mission Capital Advisors Debt & Equity Finance Group has arranged a

$10.5 million loan financing from LoanCore on behalf of East End Capital for the Wynwood Arcade — a
22,990-square-foot, newly constructed retail and restaurant space located at 50 NW 24th Street in Miami’s Wynwood neighborhood.

East End Capital, one of Wynwood’s largest property owners, worked with the Mission Capital team of Jonathan More, Jordan Ray, Steven Buchwald and Lexington Henn, which secured the financing for the innovative project.

“The Wynwood Arcade is a prime example of the prescient touch of East End, which has a solid track record of identifying thriving neighborhoods within Miami and New York City, and developing unique projects that meet the pent-up demand within those markets,” said More. “With this redevelopment, East End continues to successfully build its significant presence in Miami.”

The Wynwood Arcade, completed July 2016, was converted from an industrial warehouse into an upscale shopping experience, unlike anything in Wynwood. Three spaces remain available for lease at the Arcade, which is decorated with murals by Tristan Eaton and houses The Salty Donut, Bonobos, a new culinary and craft cocktail experience from Chef Norman Van Aken, and other local boutiques.

Wynwood is one of Miami’s trendiest neighborhoods and is recognized on a global scale as a premier destination for art, fashion, innovation and creative enterprise. It has become a hotspot for a new generation of entrepreneurs and has also attracted institutional capital and forward-thinking property developers.

“East End Capital has a finely tuned ability to pinpoint key neighborhoods prime for development and spearhead projects that are unlike anything else out there right now,” said Ray. “Wynwood Arcade is no exception and is a firsthand example of the firm’s innovative approach.”

About East End Capital:

East End Capital (www.eastendcap.com) is a vertically integrated owner, operator and manager of commercial, residential and retail real estate located in New York City and Miami. The company seeks out growth areas fueled by the arts and the creative class, and demographic and infrastructural improvements. East End adds value through development and proactive asset management.

About Mission Capital Advisors

Founded in 2002, Mission Capital Advisors, LLC is a leading national, diversified real estate capital markets solutions firm with offices in New York City, Florida, Texas, California and Raleigh, North Carolina. The firm delivers value to its clients through an integrated platform of advisory and transaction management services across commercial and residential loan sales; debt, mezzanine and JV equity placement; and loan portfolio valuation. Since its inception, Mission Capital has advised a variety of leading financial institutions and real estate investors on more than $65 billion of loan sale and financing transactions, as well as in excess of $14 billion of Fannie Mae and Freddie Mac transactions, positioning the firm strongly to provide unmatched loan portfolio valuation services for both commercial and residential assets. Mission Capital’s seasoned team of industry-leading professionals is committed to achieving clients’ business objectives while maintaining the highest levels of integrity and trust. For
more information, visit www.www.missioncap.com.

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Source: Wall Street Journal

A $98 billion drop in bonds backed by loans makes it harder for businesses, shopping-mall owners and consumers to refinance the debt.


Slowdown in Shadow Lending

Tightens Credit on Main Street

A $98 billion drop in bonds backed by loans makes it harder for businesses, shopping-mall owners and consumers to refinance debt

Some shopping malls are feeling the squeeze of a slowdown in shadow banking. PHOTO: L.E. BASKOW/LAS VEGAS SUN/ASSOCIATED PRESS


July 4, 2016 8:48 p.m. ET

America’s shadow banking system slowed sharply through the end of June, with the value of
bonds backed by personal, corporate and real-estate loans falling $98 billion from the first half of
That drop, which excludes bonds from state-backed issuers like Fannie Mae, represents a 37% decline from a year earlier, according to industry newsletter Asset-Backed Alert, and is making it harder for businesses, shopping-mall owners and consumers to refinance their debt.
The pullback was triggered by the investor flight from riskier types of bonds around the New Year and persisted even as broader market conditions improved. One contributing factor is a regulation that will require producers to hold some of the securities they create, a requirement that makes the business less profitable and has slowed the packaging of new loans into bonds. Another is uncertainty raised by Britain’s vote to leave the European Union.
The resulting drop-off in issuance is roughly equal to the volume of loans that Fifth Third Bancorp, one of the country’s largest regional banks, has on its balance sheet, according to data provider SNL Financial. It represents another weight on an economy already notable for weak business investment.
The drop-off is particularly acute in the market for commercial mortgage-backed securities. At
$31 billion so far this year, CMBS issuance is down nearly 44% from the same period in 2015. Thousands of real-estate owners who tapped the market during the boom years of 2006 and 2007 need to refinance their maturing debts this year and next. Many will have to find alternative sources of funds, said Paul Fitzsimmons, head of CMBS research at Kroll Bond Rating Agency.
Anthony D’Agostino recently struggled to refinance the loan he and three other doctors used to pay for the building that houses their private medical practices in Naples, Fla. They built the two- story, Spanish-style building with palm trees outside in 2006 with a $4.8 million loan that
became part of a commercial mortgage-backed security.
As the loan on the Banyan Professional Center neared maturity this spring, Dr. D’Agostino said a local bank he contacted offered steep terms including a 20% down payment, and gave a low appraisal for the building, which limited how much the bank would lend.
“It was ridiculous,” Dr. D’Agostino said. “We had never been late with payments, and our
building is fully occupied. It should have been a no-brainer.”
A month after the previous loan came due, he found a new loan from a regional bank with more reasonable terms. By then, the servicer on his earlier loan was threatening legal action over the delayed repayment. “It was a difficult process,” he said.
Owners of more than 400 commercial properties—including hotels, apartment buildings and warehouses—whose loans came due between January and May this year didn’t pay off by their maturity dates, according to data from Trepp LLC, which tracks loans in commercial mortgage- backed securities.
About a quarter of those loans ended up paying off afterward in full or with losses to bondholders. The rest are still being worked out. Through mid-June, some $4.5 billion in CMBS loans were transferred to special servicers that specialize in debt workouts, according to Fitch Ratings, which called it an “an accelerated pace” that is likely to continue.
“It’s absolutely taking more time to line up financing,” said Ari Hirt, a managing director at
Mission Capital Advisors, which arranges real-estate debt and equity financing.
The securitization market has long been a mainstay of the U.S. financial system, including how it helps provide financing to less creditworthy borrowers who can’t easily get loans from banks. By pooling dozens, hundreds or even thousands of loans into vehicles that issue bonds to investors, banks and other lenders can boost the volume of loans they make beyond what they can store on their own books. Investors, meanwhile, can pick from bonds with different risk profiles, comforted that properly structured instruments should pay in full even if some underlying loans default.
During the 2007 housing downturn, the concept backfired when scores of bonds backed by subprime home loans plunged in value as housing prices fell and mortgage defaults surged. Banks and investors suffered billions of dollars in losses from these products, which were at the heart of the financial crisis. Bonds backed by corporate loans, commercial mortgages and auto loans, by contrast, largely performed within expectations, and the market for those assets have rebounded since the crisis.
There are currently more than $10 trillion in outstanding securities backed by U.S. consumer, business and other loans, according to the Securities Industry and Financial Markets Association. About $7 trillion are backed by government-affiliated agencies such as Fannie Mae and Freddie Mac. The remainder consists of collateralized loan obligations, commercial mortgage-backed securities and other bonds underpinned by outstanding credit-card debt, auto loans and esoteric assets like solar-panel leases and vacation timeshares. Last year, $452 billion of these nonagency bonds were issued in the U.S., and $168 billion in such securities have been issued in the year to date, according to Asset-Backed Alert.
Slowdowns in the market quickly filter through to borrowers. GK Development Inc., the owner of a shopping center in Lufkin, Texas, whose anchor tenants include T.J. Maxx, J.C. Penney and Sears, had $26.5 million in debt that came due in March. GK President Garo Kholamian said the company worked for several months to refinance it with a new 10-year loan from New York- based lender Greystone & Co.
But amid turmoil early this year in the CMBS market, where Greystone would have sold the loan, the lender backed out. Mr. Kholamian said he spent several weeks scrambling to find an alternative, ultimately taking out a five-year loan from a small Texas bank that will keep the loan on its books.
Rob Russell, head of CMBS production at Greystone, said the firm declined the transaction because of uncertainty around the future of the traditional malls as more shoppers move online.
Big companies are feeling the squeeze as well. Issuance of collateralized loan obligations, which are securities backed by loans to companies that lack investment-grade credit ratings, has slumped 54% from last year to $26 billion, though volume has picked up since April. Close to
$100 billion in CLOs were issued last year.
CLOs have in the past bought around two-thirds of leveraged loans that are sold to investors, but the drop in issuance has pulled CLO participation down to 50%. A dozen companies that launched sales of new leveraged loans this year ended up reducing their size, according to S&P Global Market Intelligence LCD.
“It’s definitely reduced the flow of money to companies,” said Hiram Hamilton, global head of
structured credit at Alcentra, a money manager owned by Bank of New York Mellon Corp.

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