PSRS Completes $15.5 Million Loan on Japanese Supermarket Proving Retail Opportunity Exists
Amidst growing concerns about the viability of retail, specifically in the big box grocery store space, Trevor Blood, vice president, PSRS, coordinated financing with one of the firms top correspondent life companies, funding a $15.5 million loan on a 57,000-square-foot Japanese grocer, Mitsuwa Marketplace, located in Torrance, CA.
Why Does This Retail Stand Out?
Mitsuwa Marketplace is the largest Japanese supermarket chain in the US. According to Mr. Blood, the following points were essential to the success of this financing: strength of the tenant, proximity to the tenants corporate headquarters, and significance of being a community anchor for the surrounding Asian population. Low vacancy for similar space in the market also made this an attractive request by the property owners. In addition, the uniqueness of the use, with various vendors operating within the marketplace alleviated concerns that would have existed with other big box retailers.
The borrower, an Los Angeles resident, said, the process, facilitated by Trevor Blood and the correspondent relationship with the life company, made this the smoothest transaction throughout my 30-year plus career. Moreover, PSRS credits the life company who accommodated the borrowers by providing limited recourse to the borrowers, on a 25-year fully amortizing loan at a best in market rate.
To overcome concern over at-risk grocers and retailers, lenders prefer to provide loans on similar assets which have strong inline tenants to go along with the collateral, to limit the exposure of the lender. Furthermore, a long lease is typically required with the anchor tenant, to provide additional security. Without those attributes, funding a loan like this would be very difficult. Thanks to the strength of PSRS relationship with the lender, the firm can overcome the hurdles.
That is the value of working with life companies and PSRS has access to the best life companies in the market.