By Greg Koenig, SVP Stonehill CRE
In today’s highly competitive and constantly evolving real estate market, sponsors of retail commercial properties need a reliable financial partner to help them navigate the complexities of this space. There is a perception that capital is nonexistent for this sector, but that couldn’t be further from the truth. Stonehill has emerged as an industry leader – ranking as the 16th largest U.S. commercial real estate retail lender – providing creative financing solutions to help clients realize their vision for maximizing return on investment.
The fact is retail, including malls, is experiencing strong leasing momentum with increased foot traffic allowing sponsors to stabilize cash flow levels, which took a hit during the beginning of the COVID-19 pandemic. Brick-and-mortar retail locations are a necessary and growing component of a retailer’s multi-channel strategy. While traditional retail struggled before COVID, the pandemic has brought greater appreciation for in-store experiences for certain shopping items. This trend bodes well for retail as an investment.
To remain competitive, retail investors must accelerate their plans and expand their thinking to find ways to keep their retail locations relevant in a changing landscape.
Retail investors are looking at this sector with compelling strategies, including reimagining portions of the property to bring in new tenants, densifying the property by spinning off excess parking into pad sites or value-add components with a plan for re-leasing and some potential redevelopment opportunities.
Stonehill provides needed liquidity for maturing loans, new acquisitions and construction projects.
Some of the recent coast-to-coast mall transactions completed, include:
- Bellis Fair Mall – Originating a $24.0 million first mortgage loan for the 774,264 square-foot shopping mall in Bellingham, Washington.
- Cumberland Mall – Originating a $28.8 million first mortgage loan for the 953,313 square-foot shopping mall in Vineland, New Jersey.
- Greenwood Mall – Originating a $42.3 million first mortgage loan for the 970,523 square-foot shopping mall in Bowling Green, Kentucky.
- The Mall at Robinson – Originating a $25.5 million first mortgage loan for the 874,000 square-foot shopping mall in Pittsburgh, Pennsylvania.
- Town Center at Cobb – Originating a $42.0 million first mortgage for a 1,200,000 square-foot shopping mall in Kennesaw, GA
- Fairlane Town Center – Originating a $28.0 million first mortgage for a 1,450,000 square foot shopping mall in Dearborn, MI
Stonehill actively collaborates with sponsors from the initial concept stage until closing, offering expedited financing explicitly tailored for their business, allowing all parties to achieve a best-in-class financial outcome. Throughout the process, Stonehill keeps up regular touchpoints, ensuring the transactions go smoothly. This further demonstrates Stonehill’s commitment to supporting sponsor capital strategies with execution certainty amid a highly unpredictable funding landscape, increasingly a critical variable impacting retail real estate acquisition competition outcomes.
Having access to an experienced lender can provide valuable expertise and guidance to help you with your investment. With specific retail knowledge, Stonehill can provide insights into effective strategies for success. At Stonehill, we have the expertise to guide you through your options.
Greg Koenig is a Senior Vice President at Stonehill. Before joining Stonehill, he was an executive director at A large private equity firm, focusing on debt originations in all asset classes. Prior to that, Greg was a senior vice president at Newport RE, a German-based real estate investment company, focusing on acquisitions and asset management for its U.S. portfolio. Previously, he was a vice president at Rialto Capital, where he helped underwrite and asset-manage loan portfolios. Before joining Rialto, Greg worked at TriMont Real Estate Advisors facilitating loan workouts and maximizing returns on distressed assets. Greg holds a bachelor’s degree from the University of Connecticut, where he majored in Real Estate and Urban Economics. Contact Greg at gkoenig@stonehillsc.com or 1-860-833-2285.