Caruso scores $450M refi on Americana at Brand mall

Caruso has scored a $450 million loan to refinance the Americana at Brand, one of the firm’s largest assets, The Real Deal has learned. 

The firm, founded by real estate billionaire and one-time mayoral candidate Rick Caruso, picked up a five-year, commercial mortgage-backed securities loan on the Glendale mall, according to a report from DBRS Morningstar. The loan was originated by Morgan Stanley and Goldman Sachs. 

The CMBS loan has an interest rate of 7.1 percent — about 2 percent higher than the federal funds rate as of July 12, according to the report. 

Caruso did not respond to a request for comment.

The deal marks the first time the firm has turned to CMBS to finance the 570,000-square-foot property, which opened in 2008. Almost 90 percent of the loan will go towards paying off existing debt, according to Morningstar. 

Caruso previously held a $360 million senior loan from MetLife on the property, according to records filed with L.A. County. 

The property has an appraised value of $870 million, according to Morningstar, which cited a June 2023 appraisal. That’s almost double what it cost Caruso to build the property. 

About $35 million from the loan will be used to return cash to equity holders. 

Morningstar, which provides investment research and credit ratings, said it considers cash-out refinancings “less favorable” given the borrower typically has “less incentive to support a property through times of economic stress if less of their own cash equity is at risk.” 

Few refinancings have closed in the last few months, as lenders have become more stringent with requirements and loans have become more expensive. In 2013, when Caruso scored the MetLife loan, the federal funds rate was near zero percent. 

Americana at Brand, which sits on the corner of East Colorado Street and South Brand Boulevard and is often teaming with people on weekends, is 99 percent leased and about 94 percent occupied, according to Morningstar. 

However, three of the anchors — Nordstrom, H&M and Amazon Style — are seeing sales come in below expectations. 
Caruso hasn’t let his mayoral loss to Karen Bass stand in the way of future development. In Calabasas, the firm has filed plans to bulldoze a movie theater at his outdoor shopping mall at 4719 Commons Way and replace it with nearly 120 homes, plus new shops and restaurants.

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