Property Finance (July 20-26): Dealing with 2008 Maturities

Macerich Clears Out Most 2008 Maturities
The Macerich Co. in Santa Monica, CA, closed five major loan financings and a commitment on a sixth financing. The total loan amount on all six transactions is $1.045 billion and the five transactions that recently closed totaled $895 million and generated excess proceeds above the prior loans of approximately $576 million, which were used to pay down the company's maturing line of credit.
Macerich closed on a $100 million financing of The Mall of Victor Valley, a regional mall in Victorville, CA, at an initial rate of 4.32%. Some of the loan proceeds paid off the former loan of approximately $51 million with an interest rate of 5.25%. This floating rate loan has an initial term of three years extendable to five years.
Westside Pavilion, a 740,000-square-foot regional mall in Los Angeles was refinanced with a new $175 million five-year loan with an initial interest rate of 4.45%. Some of the loan proceeds paid off the former loan of $91.6 million with an interest rate of 6.74%.
The company closed on a $150 million loan on the recently opened SanTan Village regional shopping center. The loan has an initial three-year term, extendable to five years. The initial funding was approximately $117 million at an initial interest rate of 4.73%. Approximately $33 million of additional proceeds will be distributed as the remaining construction costs are incurred. Prior to this loan the asset was not encumbered by a mortgage.

A $170 million, 6.76% seven-year fixed-rate loan was placed on Fresno Fashion Fair, a super regional mall in Fresno, CA. A portion of the proceeds was used to pay off the previous loan of $63.1 million bearing interest at 6.52%.
The company placed a $300 million combination construction-permanent loan on The Oaks, a super regional mall in Thousand Oaks, CA. The initial funding was $220 million at an interest rate of 4.29%. Approximately $50 million of additional proceeds will be distributed upon completion of the construction and another $30 million upon stabilization. This floating rate loan has an initial term of three years.
Lastly, the company entered into a commitment for a $150 million, seven-year, 6.11% fixed interest rate loan on Broadway Plaza in Walnut Creek, CA. The loan is expected to close in September and part of the proceeds will be used to pay off the current loan of $59 million (with a 6.68% interest rate). Upon completion of this financing the company will have less than $100 million of remaining maturities for 2008 and expected available capacity under its line of credit of more than $625 million.