Ashkenazy Receives $210M CMBS Loan for L.A. Mall Buy
Damian Ghigliotty July 25, 2014, 4:07 p.m.
Meridian Capital Group secured a $210 million CMBS loan on behalf of New York-based Ashkenazy Acquisition Corporation to help fund its purchase of the Beverly Connection shopping center in Los Angeles, Mortgage Observer has first learned.
Meridian Senior Managing Director Ronnie Levine and Managing Director Jeffrey Berkes, both based in the company’s New York City headquarters, led the negotiations. Messrs. Levine and Berkes declined to name the lender.
But another person familiar with the transaction said Citigroup provided the 10-year loan. The loan carries a fixed interest rate of 4.99 percent and interest-only payments for the full-term, according to Meridian.
The property’s former owner, New York-based Vornado Realty Trust, put the shopping center on the market in the fourth quarter of 2013 as part of a plan to sell multiple retail properties around the country. Vornado agreed to sell Beverly Connection to Ashkenazy for $260 million in March 2013, allowing the REIT to take in a net profit of about $40 million, according to previous news reports. The acquisition and financing closed on July 8.
Retail tenants at the 335,000-square-foot shopping center in Los Angeles’s Beverly Grove neighborhood include CityTarget, Nordstrom Rack, Marshalls, TJ Maxx, Ross and Old Navy. A Saks Fifth Avenue OFF 5TH store is scheduled to open at Beverly Connection in the summer of 2015.
The property, which sits across the street from the similarly named Beverly Center mall, “is a dominant value-oriented retail destination with limited competition in Los Angeles’ most affluent and sought-after trade area,” according to Mr. Levine.
The shopping center was built on a 9.8-acre site in 1948 and has been renovated three times since. Most recently the property’s seller completed a full upgrade and repositioning in 2010.
“Beverly Connection is a trophy retail asset with an unmatched roster of investment grade retailers as tenants,” Mr. Levine said. “Meridian structured the financing for this asset to capture the strength of the tenancy, in terms of both proceeds and the interest-only component.”
Ashkenazy owns more than 100 retail, office and residential properties in the U.S. and Canada valued at about $5 billion, according to the company’s website.