Property with significant in-place cash flow poised for re-positioning

Mission Capital Advisors, a leading national real estate capital markets solutions firm, today announced that its Loan and Asset Sales Group is marketing 613,809 square feet of retail space at the Chesapeake Square Mall in Chesapeake, Virginia. The offering comprises the fee simple and leasehold interests in nearly the entirety of the mall, including four anchor stores and all of the property’s in-line space. Michael Britvan, Will Sledge, Adam Grant, and Don Pavlov of Mission Capital are marketing the property on behalf of the seller.

The entire mall totals 760,420 square feet and contains approximately 100 stores, restaurants and kiosks in addition to six anchor spaces and a 10-unit food court. Four of the six anchor spaces are included in the offering, with tenants including Burlington Coat Factory and J.C. Penney. The other two anchor spaces are independently owned and occupied by Target and Cinemark XD. Other prime tenants include Foot Locker, Bath & Body Works, Kay Jewelers, Lids and Mrs. Fields. Overall, the offered space is 58-percent occupied.

“The asset, which retains a base of strong tenants, presents a unique opportunity to make use of a well-located property in an affluent metropolitan area that is experiencing rapid growth,” said Britvan.

The property, which was most recently renovated in 1999, is a single-level enclosed mall that opened in October 1989. Featuring ample parking, the center is conveniently located off I-664 at the intersection of Portsmouth Boulevard and Taylor Road.

Recently named one of America’s Top 50 “Best Cities to Live” by 24/7 Wall Street, Chesapeake is a part of the greater Hampton Roads MSA, which has a population in excess of 1.7 million and is home to multiple Fortune 500 companies, as well as several major military institutions and bases.

“In addition to being one of the busiest port cities in the world, the immediate submarket surrounding the mall includes affluent suburbs along Portsmouth Boulevard,” added Britvan. “With its in-place cash flow and potential for redevelopment we expect to see a lot of interest in this asset.”

Mission Capital Tapped to Sell Chesapeake Square Mall

July 28. 2017

The following story has been edited to reflect that Torchlight Loan Services is now special servicer for the CMBS transaction.

Commercial Real Estate Direct Staff Report

Torchlight Loan Services has put the Chesapeake Square Mall, which it took through foreclosure roughly a year ago, on the sales block.

The New York special servicer has hired Mission Capital Advisors to market the Chesapeake, Va., property. It has started distributing marketing material to prospective investors and has scheduled an Aug. 15 call for offers. It’s aiming to complete a sale by mid-September.

The 760,420-square-foot shopping center is anchored by a Target and Cinemark, both of which own the spaces they occupy, as well as Burlington Coat Factory and JCPenney. Macy’s and Sears had been anchors, but both shuttered their stores, crippling the property’s ability to retain tenants. As a result, occupancy is now only 58.4 percent. That compares with an 81 percent occupancy level in 2014, when the property generated $5.4 million of cash flow, according to servicer data compiled by Trepp LLC….

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Chesapeake Square Mall ownership to evaluate bids to buy the mall

August 17, 2017

Chesapeake Square has received enough interest from potential buyers that it will take some time to evaluate the bids before one is chosen, according to the firm marketing the mall.

Bids were due Aug. 15 with an expectation that the highest bidder would be known the next day.

Michael Britvan, with New York-based Mission Capital Advisors, said Thursday he expects the evaluated bids will be presented to the mall’s ownership late next week before a final round of bidding. The buyer, after entering into a contract and due diligence, may not be made public for at least a month, Britvan said.

About 44 members of the local film industry signed a petition prior to the deadline in hopes of stopping the sale to discuss converting the mall into a sound stage.

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WB senior living project adjusted

August 22, 2017

A proposed project for senior residents in Chesapeake Square has been retooled for a different property in the same area.

Marlyn Development Corp. submitted a proposal to the city of Chesapeake late last year for a senior living retirement community at the former site of the Chesapeake Square Mall movie theaters, according to Grady Palmer, a Williams Mullen attorney representing the Virginia Beach-based developers.

City Council voted unanimously to pull the application at the request of the developers on July 12. The mall was recently put up for sale by the Loan and Asset Sales Group of Mission Capital Advisors, which factored into the decision.

“My understanding was that they were going to try and finalize the agreement to have it on the perimeter of the mall, instead of the middle of the parking lot,” said Councilman Roland Davis.

The site owned by Economic Development Authority would have created difficulties for potential mall developers and for residents navigating the parking lot, Davis said.

“It was in the center of the parking lot of the mall, which was not really the best location,” He said. “Not only for the residents but for future commercial possibilities.”

The proposal outlines a 160-unit apartment complex for residents ages 62 and older, as well as a beauty salon, a business center, garden plots and dog park. Palmer said the developers have decided to relocate their proposal for the adjacent, 9.4-acre Russel property owned by Bradshaw Harbor LLC.

“I think that for the public safety for the residents and for economic development, having it on the perimeter is a much better solution,” Davis said. “Otherwise it’s a really good project.”

Palmer said he expects the project to be resubmitted to the Planning Commission this November or December.

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July 22, 2017

Houston-based HH&S Hospitality has purchased the 80-room Candlewood Suites Houston Medical Center at 10025 S. Main from Pika Hotel Group. CBRE Hotels’ Michael Yu, Rahul Bijlani, Eric Guerrero and Agrama Mannapperuma brokered the transaction. The hotel, built in 2008, is just outside Loop 610 South.

Dyonyx has leased 11,250 square feet at Granite Tower, 13430 Northwest Freeway. Eugene Terry and Louie Crapitto of JLL represented the tenant. Sandy Benak and Steve West represented the landlord, Granite Properties.

BasinTek has renewed and expanded its lease with Prologis to 200,000 square feet at 713 Northpark Central Drive. Nick Peterson and John Ferruzzo of NAI Partners represented the tenant.

Puerta Verde has purchased 17.5 acres east of U.S. 59 between Rankin Road and Will Clayton Parkway as the site of a distribution facility. Nabil Murad of NM Management represented the seller, Pinecrest Financial Corp. Richard Stromatt of GDC Realty represented the buyer.

Dream Medical Management Corp. has purchased a 14,573-square-foot medical office at 3074 College Park Drive, The Woodlands. Anh Nguyen with Greentree Venture represented the buyer. Elena Bakina of Colliers International represented the seller, Integra Plaza LLC.

Lakeside Medical has leased 2,665 square feet in the Southwest Medical Plaza, 8200 Wednesbury. Joshua Gold with Finial Group represented the tenant.

Mosaic Residential has acquired the Eagle Crest and Timberlakes at Atascosita apartments in Humble from Gaia Real Estate and its partners. Clint Duncan and Matt Phillips of CBRE represented the seller.

Mission Capital Advisors has arranged a $15.3 million loan for the acquisition of the new Staybridge Suites Houston-Medical Center. Midas Hospitality purchased the 120-room extended stay hotel at 9000 S. Main. Philip Justiss, Alex Draganiuk and Lexington Henn secured the loan from Iberiabank.

HFF has arranged $66 million in construction financing for the first phase of Buffalo Heights, a mixed-use development at 3663 Washington anchored by H-E-B. BKR Memorial II owns the project, which is being developed by Houston-based Midway. Colby Mueck and Matthew Putterman arranged the loan through U.S. Trust, Bank of America Private Wealth Management.

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Mission Capital Advisors has arranged an $18 million non-recourse loan for Ashley Capital to refinance the Interchange Business Center

July 14, 2017

Mission Capital Advisors has arranged an $18 million non-recourse loan for Ashley Capital to refinance the Interchange Business Center, a 792,000-square-foot industrial property on a 55-acre site in La Vergne, Tennessee.

Mission Capital’s team of Gregg Applefield, Alex Draganiuk, Lexington Henn and Eugene Shevaldin represented the sponsor in arranging the loan.

In 2014, New York City-based Ashley Capital purchased the property from Whirlpool, which had used the property to manufacture KitchenAid appliances. After acquiring the largely vacant property, Ashley Capital made large-scale renovations, replacing the roof, incorporating additional dock doors, upgrading the building’s heating and cooling, completing the construction of office spaces and repainting the entire property.

This repositioning, coupled with the property’s access to the area’s major freeways, enabled Ashley to attract numerous new tenants and bring the Interchange Business Center to full occupancy. Current tenants include Penske Logistics, Amer Sports Company, Singer Sewing Company and Fulfillment Supply Innovation.

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By Jillian Mariutti, Director at Mission Capital

As we pass the year’s halfway mark, it’s an excellent time for real estate professionals across the industry to take stock of where we stand. I recently attended Bisnow’s National Finance Summit, where a host of industry experts — including developers and lenders — discussed some of the most important trends in today’s CRE capital markets.

One movement that’s hard to miss is that investment sales have slowed down significantly in New York City, and as James Nelson of Cushman and Wakefield noted, there have now been significant year-over-year declines in both 2016 and 2017. That said, as other panelists pointed out, the tremendous transactional volume of 2015 was an outlier. While there have been notable declines in successive years, we are still trending toward historical norms, and the market is fairly healthy overall.

In a panel on “Alternative Sources of Capital,” much of the discussion focused on debt funds. While borrowers once looked at borrowing from debt funds as a last resort, Jeff DiModica of Starwood pointed out that these funds have really established themselves as mainstream sources of capital. Debt funds are particularly attractive for borrowers seeking higher leverage than banks are willing to offer.

While debt funds are in ascendance, CMBS’ market share is in sharp decline, as the portion of commercial loans that will get securitized has dropped markedly in the last decade. While CMBS comprised 50 percent of debt volume in 2007, it’s just 10 percent of the market today.

Not surprisingly, most lenders are bullish on gateway cities, as compared with secondary and tertiary markets. But Raphael Fishbach of Mesa West noted that developments in non-primary markets are not doomed to fail in their quest for capital. Specifically, Mesa West is comfortable lending on deals with experienced sponsors who really know the local market — whatever its location.

One of the most important things to be aware of when considering real estate financing is how quickly the industry changes. As Drew Fletcher of Greystone Bassuk pointed out, today’s hot discussion topics within real estate are retail, co-working and transaction volume, none of which was considered a particularly important issue a year ago.

In discussing the current state of the market, David Brickman (the head of Multifamily at Freddie Mac) noted how healthy the multifamily sector is doing and how strong lending conditions are in that space. Michael May of CCRE mentioned how strong mezzanine financing is, referencing one recent 10-year mezz deal he structured at sub-5-percent rates.

Of course, despite the market strength, the panel agreed about the importance of having a strong intermediary to gather the information about the deal and help usher it to closing — and this is especially true for asset classes that have had struggles (such as retail). Similarly, Warren de Haan of ACORE Capital talked about the strength of transitional assets with a good business plan. With an able broker serving as an intermediary, these sorts of properties are increasingly able to secure capital at very strong rates.

The real estate world and capital markets both move very rapidly, and the space would be nearly unrecognizable from a vantage point just five or ten years in the past. From the challenges of the retail sector to the emergence of debt funds to the rise of a host of strong secondary and tertiary markets, CRE is evolving, and lenders are monitoring these changes as closely as anyone. Across the board, the most important thing for any borrower is a strong business plan and a forward-thinking approach that will enable them to adapt to changes in the market. With those prerequisites — and an experienced broker — any strong deal across the country should be able to get financing.

 

Click here to learn more about Mission Capital’s Debt & Equity Finance team

National Advisory Firm Arranges Strong Loan for Newly Constructed Hotel

Mission Capital Advisors announced that its Debt and Equity Finance Group has arranged $15.26 million of acquisition financing on behalf of Midas Hospitality for the purchase of the newly constructed Staybridge Suites Houston – Medical Center, a 120-key extended stay hotel located at 9000 South Main Street in Houston, Texas. The Mission Capital team of Philip Justiss, Alex Draganiuk, and Lexington Henn structured the recourse loan from IBERIABANK.

The flagged hospitality asset opened in January 2017, and is ideally situated in the Texas Medical Center submarket, one of Houston’s strongest submarkets. Its location near the NRG Park convention center, NRG Stadium, Rice University, and the Texas Medical Center – which contains the world’s largest cancer and children’s hospitals – assures the area of a consistent flow of commercial, sports, academic, and medical visitors.

“As a rare new hotel in this area of Houston, the Staybridge Suites is a very attractive asset, but the property’s lack of operating history was a challenge for some lenders,” said Justiss. “Additionally, with the struggling oil market, there are some capital providers who are generally limiting their exposure to Houston. Despite these challenges, we were able to secure interest from a wide range of lenders and provide the sponsor with both recourse and non-recourse options from banks, hedge funds, and debt funds. IBERIABANK was the right choice for a number of reasons, but the determining factors were that they understood the sponsor’s financial needs, their business plan, and the asset, which is in their backyard.”

“The quality of this hotel is unquestionable, and we have complete confidence that its best-in-class amenities and prime location will attract a steady stream of visitors,” said Midas’ Co-Founder, J.T. Norville. “We were also able to negotiate and structure a mutually beneficial long-term agreement with the IHG brand, one of our three preferred brands across our portfolio.”

“Midas is exactly the type of well-capitalized, talented sponsor that IBERIABANK looks to cultivate and serve as we grow our high-quality loan portfolio,” said Robert Martin, Senior Vice President for IBERIABANK. “Working with Mission was a pleasure. Their streamlined due diligence and closing process was key in facilitating the quick acquisition financing that this purchase required.”

The Staybridge Suites-franchised property caters to long-term travelers; internationally, nearly 60 percent of Staybridge Suites guests stay for visits of five or more nights. The hotel features a range of conveniences including a fitness center, barbecue grills, and an outdoor pool. In-room amenities include 42-inch cable TVs, as well as fully-equipped kitchens with cooktop stoves, full-sized refrigerators, and dishwashers.

Added Draganiuk: “The sponsor is a very sophisticated hotel operator, with the unique ability to judiciously scale corporate growth and ramp occupancy at their properties. They had been looking to invest in the Houston market for several years, and this well-located asset will be a very strong addition to their growing portfolio. We met with the sponsors, Robert and the whole IBERIA team in Houston, and they were great. They are a great fit for Midas, and we hope to close more deals with them in the future, with Midas, as well as our other clients.”

Midas Hospitality is a hospitality-focused commercial real estate investment and management firm with a portfolio currently comprising 30 hotels and more than 2,500 keys. With properties in the Midwest and Southeast, St. Louis-based Midas Hospitality has quickly become one of the premier hospitality management groups in the region.

IBERIABANK started in 1887, in New Iberia, Louisiana. For 130 years, it has focused on growth and a commitment to the community. Today, the bank continues that dedication by meeting the needs of its clients through comprehensive financial services which include Retail, Commercial, Business Banking, Private Banking, and Mortgage. Its commitment to its clients affords the bank the opportunity to provide services through an extensive network of bank locations throughout the Southeast. Through its market-centric approach, the bank is able to create, foster, and preserve client and community relationships at a local level.

Mission Capital Advisors is extremely active in arranging financing for hotel, office, industrial, multifamily, retail, and self-storage properties across the country. In recent months, the firm has arranged loans for a Midas-owned hotel property in South Carolina, as well as other hospitality assets in California, Florida, Illinois, New York, Texas, and Washington.


July 19, 2017


HOUSTONMission Capital Advisors has arranged a $15.26 million acquisition loan on behalf of Midas Hospitality to purchase the newly constructed Staybridge Suites Houston–Medical Center, a 120-key extended stay hotel. The Mission Capital team structured the recourse loan from IBERIABANK.

The flagged property opened in January 2017, and is situated in one of Houston’s strongest submarkets—the Texas Medical Center. The hotel’s location near the NRG Park convention center, NRG Stadium, Rice University, and the Texas Medical Center—home of one of the world’s largest cancer and children’s hospitals—assures the area of a consistent flow of commercial, sports, academic, and medical visitors.

“As a rare new hotel in this area of Houston, the Staybridge Suites is a very attractive asset, but the property’s lack of operating history was a challenge for some lenders,” said Justiss. “Additionally, with the struggling oil market, there are some capital providers who are generally limiting their exposure to Houston. Despite these challenges, we were able to secure interest from a wide range of lenders and provide the sponsor with both recourse and non-recourse options from banks, hedge funds, and debt funds. IBERIABANK was the right choice for a number of reasons, but the determining factors were that they understood the sponsor’s financial needs, their business plan, and the asset, which is in their backyard.”

“The quality of this hotel is unquestionable, and we have complete confidence that its best-in-class amenities and prime location will attract a steady stream of visitors,” said Midas’ Co-Founder, J.T. Norville. “We were also able to negotiate and structure a mutually beneficial long-term agreement with the IHG brand, one of our three preferred brands across our portfolio.”

“Midas is exactly the type of well-capitalized, talented sponsor that IBERIABANK looks to cultivate and serve as we grow our high-quality loan portfolio,” said Robert Martin, Senior Vice President for IBERIABANK. “Working with Mission was a pleasure. Their streamlined due diligence and closing process was key in facilitating the quick acquisition financing that this purchase required.”

The Staybridge Suites franchise caters to long-term travelers—internationally, nearly 60 percent of Staybridge Suites guests stay for visits of five or more nights. The hotel features a range of conveniences including a fitness center, barbecue grills, and an outdoor pool. In-room amenities include 42-inch cable TVs, as well as fully-equipped kitchens with cooktop stoves, full-sized refrigerators, and dishwashers.

Added Draganiuk: “The sponsor is a very sophisticated hotel operator, with the unique ability to judiciously scale corporate growth and ramp occupancy at their properties. They had been looking to invest in the Houston market for several years, and this well-located asset will be a very strong addition to their growing portfolio. We met with the sponsors, Robert and the whole IBERIA team in Houston, and they were great. They are a great fit for Midas, and we hope to close more deals with them in the future, with Midas, as well as our other clients.”

Midas Hospitality’s portfolio now comprises 30 hotels and more than 2,500 keys throughout the Midwest and Southeast. Mission Capital Advisors has also recent arranged loans for a Midas-owned hotel property in South Carolina, as well as other hospitality assets in California, Florida, Illinois, New York, Texas, and Washington.

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