Schroder secures $72.5M for commingled fund

Real Estate Weekly, Sept 29, 1993

Schroder Real Estate Associates of New York City has secured financing in the amount of $72.5 million for its Fund A, a commingled group trust of corporate and public pension funds, which owns four recional shopping centers.

The collateralized floating LIBOR-based notes were offered to both U.S. and foreign investors. Merrill Lynch International Limited served as investment banker for the transaction. The notes are rated Triple-A by Standard & Poor's Ratings Group and Aaa by Moody's Investors Service, and due in September 1999.

Mark Peskin, a Schroder managing director who arranged the financing, explained that proceeds will be used to refinance the malls' existing long-term debt at a more favorable rate, allowing additional expansions and improvements to be undertaken while improving cash flow by reducing regular payments.

Fund A was organized by Schroder Real Estate Associates, which serves as its advisor and manager of its properties. Closed in January of 1988 with cash investments of $162 million, the Fund was set up to acquire a portfolio of existing regional malls with the potential to generate above-market returns through a combination of renovations, expansions, and re-merchandising, managed and supervised by Schroder. Within one year, the fund was fully invested in four centers, which it still holds and has expanded and/or renovated: Orlando Fashion Square, in Orlando, Florida; Rogue Valley Mall, in Medford, Oregon; Magic Valley Mall, in Twin Falls, Idaho; and Northcross Mall, in Austin, Texas.