Boca Raton shopping center exemplifies investors’ fear of retail properties

TRD MIAMI /
Apr.April 18, 2012 04:30 PM

Recent activity surrounding a loan that backs Glades Plaza and the Commons at Town Center shopping complexes in Boca Raton is showing investors skittishness towards retail properties. The Wall Street Journal reported that days before JPMorgan Chase was scheduled to issue $1 billion of commercial mortgage-backed securities, it removed the $49 million loan issued by Ladder Capital Finance earlier this spring to help Woolbright Development pay off $44.8 million in debt it had on the properties.

Underwriters tend to remove loans from issues when investors raise concenrs about the credit quality behind the loan, the Journal said. The properties, on opposite sides of NW 19th Street in Boca Raton, were brought to 97 percent occupancy from 54 percent in 2009.

But with the retail sector generally suffering from high vacancy rates thanks to the economic downturn, the closure of chains and the increase of online shopping, investors are increasingly wary of retail properties. Moody’s also recently reported that the loan-to-value ratio of retail properties has been rising.

Those realities combined with the 183,000-square-foot properties’ history of instability explain why it was removed from next week’s CMBS issue. [WSJ]


Related Articles

arrow_forward_ios
Chase branch at 6916 Collins Avenue with Roberto Susi and Jose Sasson of Axiom Capital Advisors

If you can’t beat ‘em, join ‘em: JP Morgan buys North Beach branch

IMC Equity pays $45M for Margate shopping center

IMC Equity pays $45M for Margate shopping center

JPMorgan is latest bank to shrink its mortgage division with 400 layoffs

JPMorgan is latest bank to shrink its mortgage division with 400 layoffs

Nonbank mortgage lending skyrockets in Q1: report

Nonbank mortgage lending skyrockets in Q1: report

National Cheat Sheet: US house-flipping hits 12-year high, study shows that REITS with more female board members get higher returns … & more

National Cheat Sheet: US house-flipping hits 12-year high, study shows that REITS with more female board members get higher returns … & more

Who will lead JPMorgan Chase next?

Who will lead JPMorgan Chase next?

National Cheat Sheet: Multifamily building boosts US housing starts, mortgage rates hit highest level since 2014 … & more

National Cheat Sheet: Multifamily building boosts US housing starts, mortgage rates hit highest level since 2014 … & more

Ram, Pinnacle sell Hollywood apartment complex for $90M

Ram, Pinnacle sell Hollywood apartment complex for $90M

arrow_forward_ios
Loading...