Guggenheim Commercial Real Estate Finance has provided a $78m loan to MetLife and M&J Wilkow for the joint venture’s acquisition of Magnolia Park in Greenville, South Carolina.
Affiliates of MetLife and M&J Wilkow formed a joint venture for the $155m acquisition of the approximately 468,000 sq ft outdoor retail center, with MetLife taking the majority share at a 90/10 split.
The terms of the financing fit into MetLife’s blueprint for acquiring stabilized assets, typically between five and 10 years with loan-to-costs between 50% and 60%, said Chuck Davis, head of MetLife’s southeast regional office. He called the pricing, based on a margin above Libor, “very, very competitive,” but declined to be more specific. The loan-to-cost in this case was 50%.
Strong tenancy and occupancy rates (currently around with 96%), as well as the growing retail and other commercial development in the area, piqued MetLife’s interest in the asset, Davis said. A nearby BMW plant, for instance, is a top producer of cars for the automaker — just one of the many draws for well-off engineers that has ushered in a more affluent demographic.
“That corridor is quickly becoming an engineering and manufacturing hub, with much more diversification and affluence,” Davis said.
Retailers at the site include Regal Cinemas, Cabela’s, Nordstrom Rack, Golfsmith, Toys “R” Us/Babies “R” Us, Dave & Buster’s, Bed Bath & Beyond, Old Navy, and Costco. The seller, Menin Development, purchased it for $52m in 2007, launching a major redevelopment after razing the former Greenville Mall.
“Magnolia Park is a great location on a great corner in one of busiest intersections in the state of South Carolina,” said Marc Yavinsky, executive vice president at Menin. “We were able to take a failed mall that lost its anchors due both to bad luck and corporate issues, demolish the mall and create a unique trophy-type asset with a lineup of tenants that is really unparalleled in both North and South Carolina.”