Deutsche Asset & Wealth Management acquired a 50% stake in a 621,000-square-foot, open-air shopping center in Jacksonville, Fla., for $375 million -- one of the highest prices paid for a retail center of this size since the Great Recession. The deal values the retail center, St. Johns Town Center, at $750 million, not including the $270 million in debt the property has, sources say. The deal illustrates the strong demand for top-quality, high-performance retail centers.
Commercial mortgage-backed securities are doing better than corporate bonds, according to JPMorgan Chase & Co. analysts. Yields on CMBS have narrowed 30 basis points to 145 basis points. This is the tightest level since mid-2008, the investment bank says.
JPMorgan Chase has removed a $49 million loan on a retail center in Florida from a $1 billion issue of commercial mortgage-backed securities it is bringing to market this week. The 183,000-square-foot property, the Glades Plaza and The Commons at Town Center in Boca Raton, had been facing a foreclosure action before it was refinanced. The parties declined to comment on why the loan was removed from the CMBS. Scrutiny has been growing on CMBS as lenders relax underwriting standards.
Real estate owners will issue as much as $30 billion in commercial mortgage-backed bonds next year to meet their refinancing needs, predicts JPMorgan Chase. "There is a certain percentage of maturing loans that need to be refinanced in CMBS," analyst Ed Reardon said. "The interest rate is not the only feature that drives originations."
JPMorgan Chase is the leader among banks bringing to market $2.9 billion worth of commercial mortgage-backed securities. The JPMorgan Chase deal involves 42 loans on 84 properties, a source says. Wells Fargo and Royal Bank of Scotland are selling $1.45 billion in bonds.