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Simon Spin-Off to Buy Glimcher

According to a report from the Wall Street Journal on Tuesday, Washington Prime Group–a REIT spun-off from Simon Property Group–has reached an agreement to buy Glimcher Realty. The purchase price is said to be just over $2 billion. As part of the deal, Simon agreed to buy two properties from Glimcher for $1.09 million: the University Park Village mall in Forth Worth, Texas and the Jersey Gardens Mall in Elizabeth, New Jersey.

The latter property has a sizable footprint in CMBS 3.0. The mall carries $350 million of CMBS debt split across three fairly recent deals. The biggest piece of the loan is a $140 million slice that makes up 13.5% of WFRBS 2013-C18. A $130 million portion of the loan represents almost 18% of the collateral behind WWFRBS 2013-UBS1. Both of those deals closed last December. Finally, there is also an $80 million piece that makes up 6.4% of WFRBS 2014-LC14.

The Jersey Gardens loan is only nine months old and cannot be defeased for another 18 months, so we expect it to be assigned. The collateral was appraised for $707 million last October.

We should also note that the story mentioned that Glimcher will be run out of its Columbus, Ohio office. Glimcher is currently the fourth largest tenant at Continental Plaza in Columbus, which backs a $21.6 million loan that is part of WFRBS 2013-C14.

Follow Up: “Dark” Tenant Part of Story Behind New Jersey Retail Loan

Last month we wrote that the $33.5 million South Brunswick Square loan was transferred to the special servicer. The wording surprised us because almost all transfers indicate imminent default as the reason. This week, more color on the property was included in the special servicer notes.

While the loan data reports occupancy at 97%, the new notes state that a tenant with 55,556 square feet of space is “dark,” putting true occupancy at 76%. The tenant the notes appear to be referring to is Stop & Shop, the second largest in the property with 39% of the space. The Stop & Shop lease was to have ended on July 31, 2014, so we assume that the special servicer’s “dark” comment was written before that date.

South Brunswick Square is a 260,981 square-foot retail property in South Brunswick, New Jersey that backs a $33.5 million loan in JPMCC 2005-CB12, or 2.6% of the deal. The most recent financials (from year-end 2013) show DSCR at 1.14x. The loan had been on the WatchList in 2010 due to reduced income and DSCR, but it was returned to the master servicer. The note is due to mature next June. The property was appraised for $46.1 million in 2005.

Albany Office to the Special for Maturity Default

An email circulated by Fitch late on Monday reported the transfer of the $76.6 million Commerce Corporate Plaza loan to special servicing due to a maturity default. The loan is due to mature this month and backs 4% of CSMC 2007-C5. As of August rolling, the deal has already taken 10% in cumulative bond losses.

Commerce Corporate Plaza is a 746,052 square-foot office building in Albany, New York that houses mostly New York State agencies. The New York State departments of State, Health, Education, and Higher Education are four of the top five tenants and account for 33% of space. Year-end 2013 financials show occupancy at 90% and DSCR at 1.11x. WatchList comments from August state that, “The borrower intends to pay off the loan by assignment by 08/01/2014.” We will see how true that is when the deal rolls over the next few days.

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