NY-Area Retail Centers Land $663M Refi

By Gail Kalinoski

Urban Edge Portfolio, Brick Commons

Urban Edge Properties, a New York-based shopping center REIT, has refinanced 16 individual, non-recourse mortgages totaling $663 million for 15 Class A retail properties and one industrial in New York and New Jersey. HFF worked on behalf of Urban Edge to secure the 16 separate loans with two CMBS lenders, three life company lenders and one bank. The loans include 14 fixed- and two floating-rate facilities with terms ranging from seven to 13 years.

The new mortgages have a weighted average interest rate of 4.0 percent with a weighted average term to maturity of 10 years. Proceeds were used to pay off existing CMBS debt which Urban Edge described as a $544 million, 4.2 percent mortgage cross-collateralized by 39 assets that were scheduled to mature in 2020. Urban Edge generated $80 million in additional proceeds. Per HFF, the refinancing staggers and lengthens the duration of the maturity schedule.

Top Retail Assets

The refinanced portfolio comprises 98.1 percent leased retail centers anchored by grocery stores, including ShopRite, Stop & Shop and Aldi; Home Depot; Lowe’s; Costco; BJ’s Wholesale Club and Wal-Mart in addition to one multi-tenant warehouse property in East Hanover, N.J. The 16 properties total 4.6 million square feet and are in dense submarkets with affluent demographics, including 15 in New Jersey and one in New York.

“This retail financing proves that the capital markets remain highly liquid for assets in dense markets operated by best-in-class sponsorship. As lenders remain focused on diversifying their portfolios by asset type and geography, HFF experienced significant interest in the 15 retail term loan opportunities,” Scott Aiese, managing director with the HFF debt placement team, said in a prepared statement.

In addition to Aise, the HFF debt placement team included Senior Managing Directors Jon Mikula and Mike Tepedino.

Urban Edge is a REIT spun off from Vornado Realty Trust in January 2015 that acquires, develops and manages shopping centers and street retail in and near urban communities. The REIT said its total debt is now limited to 31 individual non-recourse mortgages totaling $1.5 billion with an average rate of 4.0 percent. There is no debt maturing until 2021. The company’s portfolio comprises 16.7 million square feet in 90 properties and it manages over 5 million square feet for others. Core assets are concentrated between Washington, D.C., and Boston, but the REIT also has a presence in California and Puerto Rico.

In April, Urban Edge agreed to acquire seven retail assets comprising 1.5 million square feet, predominantly in the New York City metropolitan region for $325 million from a private owner. Assets included the Yonkers Gateway Center in Yonkers, N.Y.; The Plaza at Woodbridge in Woodbridge, N.J., and The Plaza at Cherry Hill in Cherry Hill, N.J.

HFF’s debt placement team secured financing for another New Jersey asset in recent months. A joint venture between EverWest Real Estate Partners and Accordia Realty Ventures tapped HFF to arrange a $14.9 million, three-year, floating-rate loan for a warehouse and adjacent 16-acre development site in South Brunswick, N.J., from Malvern Federal Savings Bank.

Photo courtesy of Urban Edge Properties