By Ariela Moraru
Keystone Mortgage Corp. has secured a $60 million loan for Plaza de la Paz, a 295,000-square-foot shopping center in Orange County, Calif. Owned by Laguna Niguel Investors and managed by Horowitz Group, the asset serves as a primary shopping destination for residents of Laguna Beach, Laguna Niguel and Aliso Viejo.
Insurance company lending
One of Keystone’s correspondent insurance companies sourced the 15-year, 3.75 percent fixed-rate loan. One of the challenges was represented by the near-term lease rollover of major tenants. Located at 27241 La Paz Road in Laguna Niguel, the center features a mix of more than 45 national and regional tenants, including The Home Depot, Sprouts Farmers Market, CVS Pharmacy and Off Broadway Shoes. The property has easy access to State Route 73 and Interstate 5. The community center broke ground in 1989 and had its grand opening in 1991.
“Despite retail asset headwinds in the debt market, the lending source we procured for our client is a perfect example of our proven ability to deliver competitive, long-term financing solutions on large-scale commercial real estate investments,” said Tim Winton, Keystone senior vice president, in prepared remarks. “For investors looking beyond the seven to 10-year horizon, like family offices, insurance company lending is the only option for aggressive rates and flexible terms, for all asset types.”
Minimal retail completions and growing space demand in the Orange County during the remainder of 2017 will drop the vacancy rate to 3.9 percent, a 10-year low, according to a second quarter Marcus & Millichap report. Overall, loan to values typically range from 60 percent to 70 percent, reflecting disciplined underwriting, the report noted.
Image courtesy Plaza de la Paz