CLEVELAND, OHIO – July 22, 2015: Top-ten commercial mortgage brokerage firm Eastern Union Funding, one of the fastest growing in the nation, executed a high-leverage loan for the re-positioning of Southgate Shopping Center, in the Cleveland suburb of Maple Heights, on behalf of America’s Realty President Carl Verstandig.
Eastern Union Funding Senior Managing Director Marc Tropp, based in the firm’s Bethesda office, originated and arranged a seven-year $19 million loan with a floating rate of 2.50 percent over LIBOR. Provided by BB&T Bank, the loan also provides 12 months interest-only with a 25-year amortization schedule and 50-percent burn-off recourse.
Southgate Shopping center is an 800,000 square foot, 80-acre product anchored by Home Depot and surrounded by national tenants including Chase Bank, O’Reilly Auto Parts, Family Dollar, GNC, Giant Eagle Grocery and more. America’s Realty just signed a deal leasing 55,000 square feet to Forman Mills, which plans to open its doors this fall.
The real estate company is also in negotiation with other key national anchor tenants for Southgate, the value of which is appraised at $26 million and will climb to $33 million upon stabilization. America’s Realty purchased it for just $14 million and made good on a commitment to repair what was, at the time of purchase, an over 35 percent vacancy rate.
“When Carl and his team bought the asset in December of 2013 the leases were rolling and the distress signals were all there,” Tropp said. “Carl and his team didn’t waste any time in changing, that by bringing in national tenants, renewing the leases and laying the groundwork for even more big-box tenants to anchor the property.”
The property was just 50 percent occupied at the time of purchase and tenants were on month-to-month retainers. Southgate Shopping Center is now 85 percent occupied, with most tenants having signed five-year lease agreements, thanks in part to a facelift replacing lighting with energy efficient LED bulbs, upgrading storefront facades, creating fresh parking areas, upgrading the concrete curbs and other cost-saving initiatives for tenants.
“This is one of the most densely populated areas of Cleveland,” Carl Verstandig said. “Southgate was neglected when we found it, but it’s positioned to be a one-stop shop in a prime location.”
Verstandig now owns 287 shopping centers spanning 38 states.
About Eastern Union Funding: Founded in 2001, Eastern Union Funding is a top 10 commercial mortgage brokerage, according to Mortgage Bankers Association’s annual survey. Eastern Union’s sophisticated and reliable debt solutions are built on a foundation of trust, and complemented by a one-of-a-kind Equity Division. As reported by Crain's New York, Eastern Union is one of the top 50 fastest growing companies in NYC. Closing an average of $3 billion in annual transaction volume nationwide, Eastern Union is headquartered in New York, with offices in New Jersey, Maryland and Israel. For more on the country’s most trusted commercial mortgage brokerage visit www.easternuc.com.
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