Commercial Re-Development
Transaction Type: Restructuring
Industry: Real Estate
Location: Northern California
Client: Bulge Bracket Investment Bank
Role: Owner’s Representative
The client retained Cascade after they had foreclosed on a $29,000,000 loan to the owner of the property. The property was then formatted as a retail mall but was dated and losing business. Cascade’s role was to evaluate what opportunities existed for the property and to develop and execute an action plan that would preserve and maximize value for the investment bank.
Cascade assembled a team of real estate consultants including land use experts, architects, and development consultants. This team concluded that the optimum strategy for the property was to de-mall the existing property and convert it to a Life Style Center. The new facility would consist of a combination of housing, retail, parks and entertainment facilities. To accomplish this, the property had to be re-entitled which included numerous zoning and land use changes. Cascade and its team were successful in achieving these changes.
Cascade also was able to arrange a $40,000,000 bond issue that was used to develop a garage for the facility. This off balance sheet element of the project was critical to make the economics attractive for the ultimate purchaser of the site.
The re-entitled site calls for 1,200,000 square feet of retail, a 5,000 car parking garage, office space and a 120-room hotel. It is noteworthy that the two primary retail anchors, Target and Sears, both elected to stay and anchor the new project.
At the conclusion of the two-year assignment, Cascade arranged to sell the re-entitled project for $95,000,000 in a competitive sale among three qualified buyers.