Goldman Sachs Provides $102M Loan on Tucson Retail Center Acquisition

Macerich recently sold the retail center, La Encantada, to a trio of local investors for $165M


Town West Realty, HSL Properties and Iridius Capital have secured $102 million in acquisition debt from Goldman Sachs (GS) to buy a sprawling retail center in Tucson, Ariz., Commercial Observer has learned. 

The fixed-rate, interest-only commercial mortgage-backed securities (CMBS) financing covered about 62 percent of the reported cost of the 246,256-square-foot outdoor shopping center, La Encantada, which recently traded for $165 million, according to announcements from the buyers and from advisory firm JLL (JLL)

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“La Encantada is a one-of-a-kind retail and lifestyle center,” Town West Founder and Chairman Jim Horvath told BizTucson as part of their announcement of the sale. “We are excited about the opportunity to be part of a project that will bring people together from all over Tucson for years to come.”

JLL’s Patrick Dempsey led a team that represented the seller, Macerich, and Jeremy Womack and Zane Coffman, also of JLL, procured the acquisition financing for the buyers, the firm said.   

Goldman Sachs officials declined to comment on the transaction.

“The CMBS execution by the lender was best-in-class, and we are pleased with the incredibly low interest rate and full-term interest-only payments,” Womack said. “While the market for loans secured by some retail properties can be challenging, the high-quality of this asset, excellent tenant mix and stellar sponsor in the partnership between the three local owners helped facilitate us obtaining best-of-the-best loan terms for the new owner.”

La Encantada is an open air shopping center located at 2905 East Skyline Drive in Tucson, just north of the city center in the Catalina Foothills at the base of the Santa Catalina Mountains, with Mt. Kimball overlooking it. 

The property was built in 2003 and currently sports a wide mix of retailers and food and beverage outlets, including Apple (AAPL), Ann Taylor, Coach, Crate & Barrel, Warby Parker and AJ’s Fine Foods, according to the shopping center’s website. It is 93 percent leased out, according to JLL, which said that there are more than 35,000 residents within a three-mile radius of the asset that have an average annual household income of almost $121,000. 

“This asset is the crown jewel of Tucson retail,” JLL’s Dempsey said. “Many stores at La Encantada are exclusive to the area, with a draw expanding the entire market. Lack of available land for new development in the Foothills retail submarket makes La Encantada an irreplaceable property.”

HSL Properties Chairman Humberto Lopez told BizTucson that the joint venture’s “vision” for the property is an “updated and vibrant La Encantada that provides consumers with experiences and events that can’t be replicated online.” 

Mack Burke can be reached at