CBRE Arranges $45.8 Million Refinancing for Scottsdale Towne Center Retail Property

CBRE has arranged a $45.8 million refinancing for Scottsdale Towne Center, a 168,090-square-foot retail center located at 15444 North Frank Lloyd Wright Blvd. in Scottsdale, Arizona, the firm announced Aug. 17. The transaction ranks among the largest retail financings in Scottsdale year to date.

Deal Structure and CBRE Team

Shaun Moothart, Bruce Francis, Doug Birrell, Bob Ybarra and Nick Santangelo with CBRE Capital Markets' Debt and Structured Finance practice arranged the financing on behalf of the property's sponsor. The loan is structured as a five-year, fixed-rate, full-term interest-only instrument, secured through a life company balance sheet lender.

"This loan on a shadow-anchored center signals that life company balance sheets have strong conviction in this asset type again, especially in core markets like Scottsdale," said Moothart, executive vice president at CBRE.

The $45.8 million loan on 168,090 square feet equates to roughly $272 per square foot of collateral. The full-term interest-only structure allows the sponsor to maximize near-term cash flow without amortization drag over the five-year loan period.

Property Profile and Tenant Mix

Scottsdale Towne Center is situated at the southeast corner of Loop 101 and Frank Lloyd Wright Boulevard within the Scottsdale Airpark, Arizona's second-largest employment corridor. The open-air, multi-tenant center is nearly 100% leased.

The property is anchored by TJ Maxx, Ross Dress for Less and Mountainside Fitness, and shadow-anchored by Target. TJ Maxx occupies approximately 31,000 square feet, Ross Dress for Less approximately 26,770 square feet, and Mountainside Fitness approximately 50,320 square feet. Additional tenants at the center include Wells Fargo Bank, Superpumper, Taco Bell and Better Buzz, among other inline shop tenants.

Value-Add Business Plan and Refinancing Rationale

The sponsor acquired Scottsdale Towne Center in 2021. Following the acquisition, the sponsor leased a previously vacant 50,000-square-foot space to Mountainside Fitness for the fitness brand's flagship location. That lease-up drove occupancy to nearly 100% and positioned the asset for refinancing on life company terms.

The stabilization of the center's largest vacancy created a clear inflection point for the recapitalization, allowing the sponsor to lock in a fixed-rate, interest-only structure at a moment when life company lenders have shown renewed appetite for well-leased suburban retail in strong markets.

North Scottsdale Submarket Context

North Scottsdale is one of metro Phoenix's strongest retail submarkets, with average rents of $30.20 per square foot and vacancy at approximately 4.2%, according to CBRE Research. Those fundamentals help explain the life company's willingness to provide full-term interest-only financing on a shadow-anchored center.

The Scottsdale Airpark location provides direct Loop 101 freeway visibility and access, supporting both local and regional retail draw. The center serves affluent surrounding communities including DC Ranch, McDowell Mountain Ranch and Grayhawk.

CBRE Group, Inc. (NYSE: CBRE) is headquartered in Dallas and is the world's largest commercial real estate services and investment firm, with more than 155,000 employees serving clients in more than 100 countries.

Sources

CBRE Press Release: CBRE Arranges $45.8 Million Refinancing for Scottsdale Towne Center