Shopping Centers Today International

DEC 2015

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

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Ore. In retail the company prefers smaller properties such as neighborhood and strip shopping centers. "We had a borrower come to us for a $2.5 mil- lion acquisition loan on a strip center in Glendale, California," Padilla said. "The opportunity was a reverse 1031 exchange, and Opus was able to under- stand the deal quickly and close in about 35 days." Opus Bank closes approxi- mately 50 loans per month, Padilla says. Regional bank deals are often a lot cheaper than even CMBS, because the banks have streamlined loan documentation, reduced closing costs and lowered processing fees, says Yazdi. "Some don't require phase one [environmental] and don't have ex- pensive legal fees," Yazdi said. "A bor- rower could see $5,000 to $10,000 in savings on a straight retail deal." A c c o r d i n g t o a R e a l C a p i t a l Analytics lender composition survey, "regional/local banks have average loan sizes far smaller than other lenders." Last year insurer loan sizes averaged $27.1 million, CMBS averaged $14.3 million, and at the bottom of the list were regional or local banks with an av- erage loan size of $5.4 million. Portland-based Umpqua Holdings Corp. (doing business as Umpqua Banks), which has a five-state footprint in the Northwest, takes a different approach, lending on retail into the low-$20-million range. It will do con- struction loans, value-add redevelop- ment and mixed-use. "We look at sev- eral types of retail real estate, but what we really focus on is the experienced developers who we have relationships with that are our clients," says John Swanson, Umpqua Bank's executive vice president of commercial bank- ing. "Retail is so specialized that we try to align ourselves with who we think are the key developers for the types of products that fit our market." Less than 20 percent of Umpqua Bank's construction and permanent loan vol- ume is retail, with a major swath still going to multifamily. It is not just size that makes a difference with regional lenders — placement is key as well. "In terms of retail, we are seeing increasing inter- est mostly because the fundamentals 110 S C T / D e c e m b e r 2 0 1 5 "Regional bank deals are often a lot cheaper, because they have streamlined loan documentation, reduced closing costs and lowered processing fees."

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