Emerald Creek Capital (ECC) provided financing for the acquisition of 532,832 SF of retail space within the 672,918 SF Washington Crown Center (WCC) in Washington, Pennsylvania. Built on 94 acres, the property was acquired for $20,000,000.
Since 2012, there has been a lot of positive momentum including new lease agreements with junior anchors such as Marshalls, Ross Dress for Less, Jo-Anne Fabrics, and ULTA Beauty. Anchors included in the acquisition are Gander Mountain, the Bon Ton, Sears, and Hollywood Theaters. While the focus of many regional malls owners across the country has been maintaining their current occupancy levels, WCC has been in a growth mode.
Time Constrained Acquisition
With a large number of lease agreements, reciprocal easement agreements, and co-tenancy agreements, regional malls remain a challenging asset class to finance quickly. The buyer entered into a purchase and sale agreement with a time of the essence clause. The lack of available financing that can close within 30 days on a regional mall creates excellent buying opportunities for a well-capitalized sponsor.
Management Experience and Agility
Experience is paramount in the acquisition phase of regional malls. It’s important to understand the sales revenue each store needs to succeed and operating cost the tenants can afford. Regional malls are evolving, and the management of these assets must be agile. For owners that have layers of internal bureaucracy, leasing opportunities can be missed due to timing and structure. It’s not all about maximizing base rent as there is intrinsic value in bringing complimentary tenants together that will that drive traffic.
About Emerald Creek Capital
Since 2013, ECC has financed five regional malls and realized investments in three of them. Although financing regional malls is a small component of ECC’s portfolio, ECC is pleased with the execution and success of our borrowers to date.
Since inception in 2009, ECC has originated over half a billion in short term loans in nearly 200 transactions. Property types as collateral for an ECC loan include multi-family, retail, office, mixed-use, light industrial, condominium inventory, and urban development sites.