Barclays priced $1.3 billion of securities backed by two large commercial mortgages on malls, according to Standard & Poor's.
The bank priced the $600 million of AAA’ rated notes issued from the $1.05 billion Houston Galleria Mall Trust 2015-HGLR at swaps plus 93 basis points. Standard & Poor’s rated the deal.
The deal refinances the senior portion of a $1.02 billion securitized loan backed by Houston’s Galleria Mall, which is owned and controlled by a 50-50 joint venture between Simon Property Group and Institution Mall Investors, also sponsors of the underlying loan.
The new loan has a 10-year term and pay only on interest.
The trust is moderately leveraged, relative to other single-asset CMBS transactions rated by S&P, with a loan-to-value ratio (LTV) of 74.7%, based on S&P’s valuation. The LTV based on the appraiser's valuation is only 47.7%.
By comparison, the second large-loan CMBS that Barclays priced today, a $280 million deal called BBCMS Trust 2015-VFM, priced wider. The deal's AAA' rated notes pay swaps plus 102 basis points.
The deal is backed by an amortizing 30-year loan that is secured by the Vinatge Faire Mall, in Modesto California. The loan is more highly levered, with an LTV, based on S&P’s calculation at 86.1%, than the Houston Galleria transaction.
Houston’s Galleria Mall is widely considered one of the dominant malls in the U.S., according to S&P. The property is anchored by non-collateral Macy's and Nordstrom, as well as Saks Fifth Avenue and Neiman Marcus, which are both on ground leases. Other notable tenants include H&M, Zara, Top Shop, Forever 21, Express, Victoria's Secret, Louis Vuitton, Tiffany & Co., and Apple, creating a tenant line-up unmatched by any of the mall's local competition.
Macerich Co., a publicly traded REIT that is currently under bid by Simon Property Group, has owned the Vintage Faire Mall property since 1996 and invested $38.0 million in capital improvements at the property since 2001. In 2008, $24.0 million was spent on developing the 60,000-sq.-ft. Village addition, an adjacent outdoor shopping area that has attracted several higher-end tenants to the property, such as Apple, Sephora, and Coach, among others. This expansion currently generates more than $2.0 million in annual income.
Macerich is the sponsor on loan secured bu the Vintage Faire Mall.
