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Day of Reckoning Comes for U.S. Shopping Malls Laden With Debt

June 20, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Suburban Detroit’s Lakeside Mall, with mid-range stores such as Sears, Bath & Body Works and Kay Jewelers, is one of the hundreds of retail centers across the U.S. being buffeted by the rise of e-commerce. After a $144 million loan on the property came due this month, owner General Growth Properties Inc. didn’t make the payment.

The default by the second-biggest U.S. mall owner may be a harbinger of trouble nationwide as a wave of debt from the last decade’s borrowing binge comes due for shopping centers. About $47.5 billion of loans backed by retail properties are set to mature over the next 18 months, data from Bank of America Merrill Lynch show. That’s coinciding with a tighter market for commercial-mortgage backed securities, where many such properties are financed.

Read the entire article in National Real Estate Investor

Study: Store design key to attracting C-store shoppers

June 15, 2016 by Randybaconin Real EstateLeave a Comment

Store design plays a crucial role in attracting customers and driving foodservice sales in convenience stores.

That’s according to the new study, Food-Forward C-store Design, which comes as more convenience retailers are pursuing foodservice as a growth opportunity.

The report, from foodservice research and consulting firm Technomic and retail branding and design agency Chute Gerdeman, was undertaken to understand how evolving consumer demands and preferences for prepared foods and beverages can be met through convenience store design, décor, and layout.

“Foodservice is now a strategic priority for the majority of convenience retailers, and the competitive landscape requires them to raise the bar on store design to increase consumer appeal,” said Donna Hood Crecca, associate principal at Technomic.

The interactive survey of 1,000 consumers revealed insights about the role of store layout and design elements in the success of convenience foodservice programs. Key takeaways include:

Read entire article ar ChainStoreAge.com.

To find out more about small commercial mortgages contact us at Liberty Realty Capital.

Credit Crunch for Farm Renters Compounds Stress on U.S. Growers

June 14, 2016 by Randybaconin Real EstateLeave a Comment

(Bloomberg)—American farmers who expanded production using rented land during the commodity boom a few years ago are now struggling to repay loans.

A crop glut has eroded prices and sent profit to a 14-year low, but rents have barely budged and debt levels are the highest in more than three decades, government data show. Bankers are cutting back on loans that aren’t secured by land, so more farmers are tapping into a U.S. Department of Agriculture program designed to be the lender of last resort. And it’s almost out of money.

The USDA’s Farm Service Agency has allocated $140 million a month on average for direct operating loans since Oct. 1, leaving just $129 million in the budget for the remaining four months of the fiscal year. With about 39 percent of U.S. farms operating on rented property, increased government intervention signals lower land values and more consolidation because debt-strapped and younger farmers will be forced to quit, according to farm groups advocating for more financial aid.

Read entire article in Bloomberg news and republished in National Real Estate Investor

To discuss financing needs contact Liberty Realty Capital.

Mind The Gap

June 13, 2016 by Randybaconin Real EstateLeave a Comment

Falling Revenue At Retailer Creates Uncertainties For CMBS Loans

231 securitized commercial mortgages, with a balance of $13.9B, are now exposed due to the struggling retailer GAP. According to data obtained from Morningstar Credit Ratings, more than half of the loans are backed by collateral where leases with Gap expire within the next two years.

32 properties with a combined balance of $819M could have their occupancy level fall below 80% if Gap vacates. However, the vast majority are offset by the relatively small space the retailer occupies, with only 14 locations compromising more than 20% of gross leaseable area.

Read entire article on The Gap at Bisnow.com

Sears May Sell Its Best-Known Brands

June 7, 2016 by Randybaconin Real EstateLeave a Comment

After years of red ink, the retailer considers selling Craftsman, Kenmore, and DieHard.

Once upon a time, Sears was the Amazon.com and Walmart of U.S. merchandising. Customers could order just about anything for delivery—even a kit to build a 10-room colonial-style house—from the Sears catalog, a compendium of the American dream with a reach into the rural parts of the country that helped make Sears, Roebuck America’s largest merchant. Sears helped create the shopping mall in the 1950s, working with developers to build the retail centers that grew with the exodus to the suburbs. And when customers needed financing, it created a massive credit arm that paved the way for the MasterCards and Visas of today.

View entire article at Bloomberg News

To find out more about commercial mortgage financing view more here

Banks Take a Step Back on Construction Loans

June 1, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Construction lending is on the rise as development pipelines continue to expand across commercial and multifamily markets. Yet borrowers are working harder to access that capital.

The volume of commercial and multifamily construction loans put in place in January reached $311.3 billion based on total project value. That represents a 14.3 percent increase year-over-year and a 40.7 percent increase compared to January 2014, according to the Mortgage Bankers Association’s Commercial/Multifamily Quarterly Databook for fourth quarter 2015.

View entire article in National Real Estate Investor.