Las Vegas $55M Retail Loan Hits Special Servicer Amid Refi Fears
Cathy Cunningham July 19, 2016, 6:13 p.m.
A $55 million loan backing the Cheyenne Commons retail center in Las Vegas has been transferred to special servicer CWCapital Asset Management for imminent monetary default, according to data from Trepp. The borrower is Kimco Realty, a real estate investment trust headquartered in New Hyde Park, N.Y.
Cheyenne Commons is a 361,000-square-foot retail center located at 3189 North Rainbow Boulevard in Las Vegas. The loan on the property is scheduled to mature in November and makes up 1.96 percent of the J.P. Morgan-sponsored JPMCC 2006-LDP9 commercial mortgage-backed security.
Although the loan is current, the borrower believes it will not be able to refinance it at maturity due to a decline in the property’s value, according to servicing commentary. New appraisals have now been ordered. The most recent appraisal, carried out at the time of origination in October 2006, valued the property at $81.5 million. The center was 73 percent occupied in 2015, down from 87 percent in 2014.
Additionally, approximately 48 percent of Cheyenne Common’s square footage is taken up by leases that are due to expire within the next two years. Walmart is the power center’s largest anchor—the superstore occupies 115,000 square feet, or 32 percent, of the retail space and has a lease which expires in July 2017. The second largest tenant, Marshalls, occupies 30,000 square feet and a lease that is set to terminate in January 2017.
“Only 4.5 percent of the total Vegas CMBS retail balance is marked as delinquent,” said Sean Barrie, an analyst at Trepp. “To boot, only 5 percent of the total balance is backed by properties that are reporting an occupancy below 80 percent as their most recent level. There are concerns elsewhere in the commercial realm of Vegas, but the retail sector does not appear to fall in that category.”
Officials at Kimco Realty declined to comment.