HFF Arranges $210M Financing for National Retail Portfolio

By Scott Baltic, Contributing Editor

Kevin MacKenzie, HFF

Phoenix and Dallas—HFF has arranged a total of $210 million in first lien financing for Westwood Financial Corp., secured by 10 retail centers totaling roughly 974,000 square feet in Arizona, California, Kansas, North Carolina and Texas, HFF announced late last week.

The two new loans comprise a substantial chunk of Westwood’s restructuring of 77 of is 120 retail center holdings (representing more than 280 entities), plus its management company, into a single $1.2 billion retail real estate company, operating as Westwood Financial. In an announcement about 10 days earlier, Westwood co-CEOs Joe Dykstra and Randy Banchik had highlighted “massively reduced complexity,” easier access to capital and appeal to larger investors as major advantages from the reorganization.

HFF advised Westwood Financial Corp. on new loans and transferring of loans as part of the $1.2 billion consolidation. In that process, HFF placed several new loans, including a 10-year, $110 million, fixed-rate portfolio loan with a correspondent life company and a $100 million senior credit facility with Wells Fargo Bank’s Real Estate Capital Markets Group. HFF will service the former.

“HFF has represented us on more than 40 loans for our affiliates over the last four years,” Dykstra said in a prepared statement. These latest two loans had to fund the same day as the closing consolidation, added Dykstra, who called the execution “flawless.”

“The life company provided a low-cost, long-term, fixed-rate option using a forward rate lock, and Wells Fargo provided the flexibility needed to bridge assets into a strategic credit facility including a go forward solution on additional assets,” stated HFF Senior Managing Director Kevin MacKenzie. “It was a great introduction for Westwood to a new lending relationship with the life company and a new credit facility with Wells Fargo.”

The complex closing process, MacKenzie explained, include “multiple assets, a newly formed sponsorship entity and creative solutions for the extended timeline to close.”

The $110 million loan covers six assets that are 91 percent leased overall:

• Village Plaza, Phoenix, 79,575 square feet;
• Plaza Del Rio, San Juan Capistrano, Orange County, Calif., 65,054 square feet;
• Stateline Village, Prairie Village, Kan. (metro Kansas City), 103,124 square feet;
• Hebron Parkway Plaza, Carrollton, Texas (metro Dallas), 46,789 square feet;
• Old Town Shopping Center, Dallas, 226,414 square feet; and
• Steelecroft Shopping Center, Charlotte, N.C., 79,226 square feet.

The seed assets in the Wells Fargo facility are three grocery-anchored centers and one power center with a shadow grocery:

• Camelback Village, Phoenix, 77,031 square feet;
• Mercado Del Rancho, Scottsdale, Ariz. (metro Phoenix), 89,506 square feet;
• Magnolia Vineland Shopping Center, North Hollywood, Calif., 30,300 square feet; and
• Legacy Village, Phoenix (square footage not provided).

These centers are 95 percent leased overall.

The HFF debt placement team consisted of MacKenzie, Director Jim Curtin, Associate Director Cory Fowler, Associate Jamie Kline and Real Estate Analyst Lauren LaFever.