New York, NY — July 7, 2017 — Hunt Real Estate Capital, a leader in financing commercial real estate throughout the United States, announced today it has refinanced two retail properties located in Austin, Texas for the same sponsor. The total loan by Hunt Real Estate Capital is $27.7 million.
The properties include:
· The Linc. Located at 6406 North Interstate 35 Frontage Road, The Linc is a 178,743 square foot community retail center. The property was built in 1984 and is situated on a 15.61 acre site ground leased on a long-term basis until December of 2082. Hunt Real Estate Capital provided an $11.2 million first mortgage bridge that will be used to refinance the existing loan, fund future leasing costs and cover capital expenditures to lease-up and stabilize the property.
The property is currently 57.2% leased to 14 tenants including Easy Tiger, Pluckers, Rooster Teeth, Austin Film Society, Big Joy Beauty Supply, Wellmed Medical Management, Men’s Warehouse, and Chase Bank. The subject is currently underperforming in the submarket, which has an average occupancy of 97%.
The Linc is located in the Central/Downtown Austin submarket and is situated approximately 5.3 miles north of downtown Austin.
· The Crescent. The Crescent is an 117,980 square-foot grocery-anchored retail center located at 6929 and 6903 Airport Boulevard and 610 Kenniston Drive. The property was built in phases from 1964 to 1987 and is situated on a 12.23 acre site. Hunt Real Estate Capital provided a $16.5 million first mortgage bridge loan to refinance the existing loan, fund a CapEx reserve, and cover future costs to lease-up and stabilize the property. The ground lease on this property expires in 2058
The ground lease for 6929 Airport Boulevard commenced January 1, 1984 for a 35 year initial term expiring on December 31, 2018. The ground lease for 6903 Airport Boulevard commenced January 1, 1990 for a 30 year initial term, expiring on January 1, 2019. The property is anchored by 99 Ranch and is currently 54.5% occupied by twelve additional tenants including Dollar General, Kula Sushi, BB&T Bank, Taqueria, and TeaHaus.
The Property is located in the Central Austin submarket and is located approximately 5.6 miles north of downtown Austin.
The Sponsor is Misuma Holdings, a commercial real estate development firm, with an emphasis on large-scale retail, office and mixed-use asset classes. Misuma, along with its partners, has owned and operated assets in Austin, San Antonio, Fort Worth, El Paso, Los Angeles and New Orleans comprising of over 4.4 million square feet of retail space.
Both loans are structured as a 36-month floating rate loan with two options to extend the term of the loan for a period of 12 months each.
“The borrower purchased both properties in distressed states,” explained RJ Guttroff, Managing Director at Hunt Real Estate Capital. “But this situation provided opportunity for Misuma Holdings to participate in a significant investment and redevelopment project underway in the local area.”
The original owner of Crescent intended to develop the property into a high-rise multifamily apartment complex and spent years vacating tenants to prepare for a residential execution. They ultimately ran into roadblocks with the ground lessor and abandoned their plans to redevelop. Misuma purchased the property and over time returned to a purely retail execution strategy.
Crescent was acquired by Misuma in an REO sale in 2013. At the time of acquisition, the property was largely vacant, had suffered from disrepair and mismanagement, and featured a tenant roster comprised of low quality tenants on short term leases.
“The borrowers are experienced real estate investors with a tenure of over thirty years in the commercial real estate industry. In addition, they are well versed is ground-up development, distressed property rehabilitation and providing full service property management service,” added Guttroff. “We were pleased to deliver these bridge loans to a quality borrower to help reposition these retail properties in the local market.”
Austin has emerged as one of the limited number of U.S. metropolitan areas talented and educated young Americans are flocking to. Named by Forbes as America’s No. 1 Boom Town, Austin fosters a booming economy with a low cost of living. Its growing job market and thriving art and music scene anchored by the University of Texas and the tech sector make Austin a thriving city with a young, highly educated and vibrant population that attracts business and tourism.