Shopping Centers Today

FEB 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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T H E B O T T O M L I N E $124.5 million Urstadt Biddle Properties Inc. bought four grocery-anchored New Jersey proper- ties totaling about 375,000 square feet from undis- closed sellers. Anchors include Kings Supermarket- and A&P; $37.3 million Retail Centers of America bought Colonial Landing, a 259,024-square- foot power center in Orlando, Fla., from Weingarten Realty Investors and private investors. Tenants include Bed Bath & Beyond and PetSmart $48.3 million DLC Management Corp. bought The Shoppes at South Hills, a 516,800-square- foot power center in Poughkeepsie, N.Y., from an undisclosed seller. Tenants include Ashley Furniture and ShopRite $155 million Menin Development sold the final parcel of its 800,000-square- foot Magnolia Park mixed-use property in Greenville, S.C., to MetLife Core Property Fund. Anchors include Cabela's and Nordstrom Rack $162 million RPAI bought the 258,000-square- foot retail portion of Washington, D.C. mixed-used property Downtown Crown. Harris Teeter anchors the center $389 million Rockspring Property Management sold seven U.K. commu- nity retail centers to Ellandi $830 million Safeway Inc. sold its subsid- iary, Property Development Centers LLC, whose portfolio includes 11 finished centers and nine under development, to Carlsbad, Calif.– based Terramar Retail Centers DEAL OF THE MONTH Deal Barometer W H O I S P A Y I N G H O W M U C H F O R W H A T Lenders to develop taste for risk in 2015: Survey Commercial-mortgage lending is expected to increase in 2015, as lenders' appetites to place new loans remain strong and borrowers' appetites to borrow increase, according to a Mortgage Bankers Association survey of 60 commercial- mortgage origination firms. All of the firms surveyed said they expect originations to increase this year, with 68 per- cent saying they expect an increase of 5 percent or more. Almost three-quarters say they expect their own firm's originations to increase by 5 percent or more. "Commer- cial-mortgage lenders anticipate another competitive year in 2015," said Jamie Woodwell, MBA's vice president for commercial real estate research. "Lenders' appetites for loans remain very strong, and with the 10-year loans made during 2005, 2006 and 2007 maturing, lenders also anticipate growing demand from borrowers." Loan risk is also expected to grow. Most respondents (73 percent) char- acterized the loans made in 2014 as "medium" risk. This year more respondents expect loans to be "somewhat high" risk (38 percent, versus 9 percent in 2014). Lenders were surveyed on a scale of very low, somewhat low, medium, somewhat high and high. Cap rates on single-tenant, net-leased retail properties in the U.S. hovered at a historically low 6.5 percent in the fourth quarter, helping drive institutional inves- tors out of the sector, according to brokerage firm The Boulder Group. Last year private investors accounted for 60 percent of retail net-lease transactions, a sig- nificant increase from 42 percent in 2013. "Private buyers continue to dominate the net-lease market in the low-cap-rate environment as institutions cannot typi- cally pay the cap-rate premiums, due to yield restriction," said John Feeney, the firm's vice president. Single-tenant deals are private affairs 58 S C T / F e B r u a r y 2 0 1 5 One-year total returns SOURCE: SNL FINANCIAL REIT equity REIT retail Russell 3000 –10 –5 0 5 10 15 20 25 30 35% 10/14 12/14 8/14 6/14 4/14 2/14 12/13 S O U R C E : S N L F i N a N C i a L All REITs Retail REITs 1 2 3 4 5% 4Q '13 2Q '14 2Q '13 4Q '12 2Q '12 4Q '11 2Q '11 Same-store NOI

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