Craig Realty refis San Clemente Outlets with $140M in loans

Insurers PacLife and MetLife provide senior and mezzanine debt for 350K sf mall

Craig Realty Scores Refinance for San Clemente Outlet Mall

Craig Realty’s Steve Craig and the Outlets at San Clemente at 101 West Avenida Vista Hermosa (Getty, Google Maps)

Craig Realty has refinanced the Outlets at San Clemente in Orange County, with two loans from insurance firms, The Real Deal has learned. 

Pacific Life Insurance, owned by Pacific Mutual, provided a $105 million, fixed-rate senior loan, according to property records filed with Orange County. 

Also, MetLife provided a $35 million mezzanine loan, according to a person familiar with the matter. Bergstrom Capital Advisors helped arrange the deal, the person added. 

Craig Realty, based in Newport Beach, plans to redevelop the 500,000-square-foot outlet mall, which has land available for housing or new retail, the source said. The developer did not respond to a request for comment.

The financing was used to pay off a previous loan from Wells Fargo. 

A handful of malls have scored refinancing packages over the last year and a half, though the rise in interest rates has complicated new debt deals. In July, Caruso scored a $450 million loan that was packaged into a commercial mortgage-backed securities deal to refinance the Americana at Brand in Glendale. 

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And while many banks have pulled back from commercial real estate lending over concerns around existing exposure, insurance firms have remained active, according to debt brokers and developers. 

Life insurers held about 13 percent of all commercial real estate loans as of mid-2023, according to Fitch Ratings. Banks hold about 61 percent of all CRE loans. 

Craig Realty, run by Steve Craig, opened the outlet mall in 2015, after planning the development for more than 16 years. 

Adidas, Calvin Klein, Chick-fil-A and Lululemon are all tenants at the property, which houses about 80 stores, according to its website. 

Craig Realty’s focus is on outlet malls and shopping centers, but the company has pivoted in recent years to planning mixed-use developments. 

In the city of Commerce, Craig Realty has planned a major overhaul of the Citadel outlets, including adding 10 acres to build two additional hotels, a movie theater and another 160,000 square feet of retail on site.