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Jones Lang LaSalle ("JLL") and Ten-X have been retained on an exclusive basis by the Seller, a CMBS special servicer, to arrange the sale of a $9.6 million non-performing loan (the "Loan"). The Loan was originated in December 2010 with an initial balance of $11,200,000 to refinance existing debt and is secured by a first-lien priority mortgage on the fee simple interest in a 120,391 SF grocery-anchored retail center (the "Collateral" or "Property"), in State College, PA. The Loan was structured with a fixed interest rate of 5.97% and P&I payments based on a 30-year amortization schedule through the term, which matured in January 2021.
The Loan was transferred into special servicing in March 2020 when the Borrower defaulted on debt service payments due to a Property level decline in cashflows and COVID-19 issues nationally. The court appointed an uncontested receiver in September 2020, following a foreclosure action filed in August 2020, which is currently in the late stages with a judgment-in-hand. As of October 2021, the Loan is 120+ days delinquent with the current principal balance of $9,564,675.
Constructed in 1988 on a 13.32-acre lot, the Property is located 2.2 miles from Pennsylvania State University’s largest campus, University Park – which boasts a student population of over 46,000 and over 2,700 full-time administrative staff. The Property is currently 45.8% occupied, with a near-term expiration date for a 5,286 SF tenant, leaving the Property 41.4% occupied by year-end.
Transaction Auction Dates & Documents
Auction Start Date: Monday, December 13, 2021
Auction End Date: Wednesday, December 15, 2021
VALUE-ADD UPSIDE - The Property is forecasted to be 41.4% occupied by year-end, leaving 58.6% of the net rentable area marketable for lease-up increasing in-place cashflows. The 65,301 SF former grocery story has high ceiling heights offering flexibility to accommodate one or more future tenants.
RECIEVER IN PLACE + JUDGMENT IN HAND - An Investor is likely to have an accelerated path to title with a court-appointed receiver appointed and a foreclosure judgement-in-hand.
ATTRACTIVE BASIS - At $9,564,675 in outstanding principal balance, the Loan sits at a healthy and attractive basis of $79 PSF, below replacement cost for like-kind product today.
NEARBY COLLEGE MARKET - Property is located approximately 2 miles from the University Park, the Main Campus of The Pennsylvania State University, a top-ranked university. The student population on campus is approaching 50,000, in additional to full-time faculty and staff.
SUBMARKET LOCATION - The Property is situated directly on East College Avenue, which is the main east/west business artery and thoroughfare connecting State College, providing excellent access and visibility to the property.