The family that has controlled Dallas’ NorthPark Center for the last 60 years is reportedly close to landing a $900M CMBS loan to refinance debt tied to the 1.9M SF mall and buy out its partner.
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The new two-year floating-rate loan was negotiated with Wells Fargo, Morgan Stanley and Goldman Sachs, according to a presale report compiled by Fitch Ratings. Three floating-rate mezzanine loans totaling $300M are also expected to be provided.
Proceeds will be used to refinance $650M of existing debt and buy out J.P. Morgan Asset Management’s equity interest in the mall.
J.P. Morgan acquired a 60% interest in the property in 2014 for its Strategic Property Fund.
NorthPark has been owned and operated by two generations of the Nasher-Haemisegger family through their NorthPark Management Co. since it was developed in 1965. This deal will make the family the sole owners of the property once again.
NorthPark Management didn’t immediately return a request for comment.
An August appraisal of the property by Cushman & Wakefield gave the mall an as-is value of $1.6B. Based on that appraisal, the loan-to-value ratio for the new $900M financing is 55.5%.
Including the mezzanine debt, NorthPark Center’s total LTV is 63.5%.
The mall generated more than $1.4B in sales last year. Its six anchors — Dillard's, Macy's, Neiman Marcus, Nordstrom, Eataly and a 15-screen AMC theater — accounted for $499M of those sales, according to the report.
Located at the corner of U.S. Highway 75 and Northwest Highway, the mall has more than 190 tenants and was nearly 99% occupied in June, according to the report. The mall's average occupancy for the last 10 years was 95.6%, and it hasn't dropped below 93.1% since 2015.
Nearly 40% of tenants are market-exclusive to NorthPark Center, which helps keep customers returning despite numerous high-end shopping options in the area.
The property's private ownership allows a high level of tenant curation, which CBRE Vice President Elizabeth Herman Fulton said helps NorthPark Center remain a powerhouse mall.
“So many markets have the mall that used to be really cool, and it's not cool anymore,” Fulton told Bisnow. “NorthPark just keeps getting better.”
Galleria Dallas and Grapevine Mills were the only comparable malls in the Metroplex with similar occupancy rates, according to the Fitch report.
NorthPark Management has spent more than $25M on capital improvements at the property, including a 2018 redevelopment of the south end exterior as well as roof and HVAC replacements last year.
NorthPark Center could soon face additional competition from the city's Knox-Henderson corridor, which is just three exits south of the mall. Two new mixed-use projects are set to deliver 177K SF of high-end retail and restaurant space to the roadway next year.
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