| 1E - DSCR < 1.10 , 1F - DSCR drop from U/W, 4B - EGI < 80% U/W EGI, and 4A - Occ < 80% U/W occ. The loan is secured by a 11,460 sf shadow anchored retail property located in Torrance, CA, built in 1959. The property was inspected on 07/16/08; rated in Good condition. Q1-2009 NCF DSCR is .54 with an occ of 56%; YE 2008 NCF DSCR was .65 with an occ of 56%. The decline in NCF is a result of an EGI decline combined with increased OPEXP. Ann 2009 EGI has dropped 30% from U/W due to an occ drop & base rent decline. ACE Beauty, who occupies 3500 sf or 13.1% NRA, has a lease that expired on 11/30/2007. At U/W it was noted that the tenant lease expired and the lease contained one 5 year renewal option at market rental value. At U/W, the tenant had indicated that they will holdover the property until lease negotations had been finalized. To mitigate the expiring lease for ACE Beauty, a master lease for the space was required. The master lease terms included a rate of $33 PSF/NNN for a five year term. The Borrower Principals were required to guarantee the master lease & a rent escrow equal to one years reimb in the amt of $142,535. The master lease & rent escrow can be released when certain criteria per the loan docs has been met. Per a recent update from the Bwr, ACE Beauty vacated. Total vacant sf as of March 2009 RR is 5000 sf which includes the former ACE Beauty space and the recently vacated T-Mobile space. Bwr secured a tenant to lease the former T-Mobile space. Effective 04/01/09, Martial Arts Studio took occ of 1500 sf for a 5 year term at $27 PSF. For the former ACE Beauty space, Bwr is currently working with a few prospective tenants including a veterinarian and a bank; however, no firm offers have been received. Per Bwr, the property is listed with CB Richard Ellis. Asking rates for the former ACE Beauty space are $3.00 - $3.50 PSF. 2008 operating expenses have increased 37% from U/W due to higher than normal RM. Bank of America will continue to monitor the loan.
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