$17MM Retail Acquisition | San Antonio, TX

Structured and arranged a combination of long-term, fixed-rate senior debt and joint venture equity to capitalize the acquisition and repositioning of a 102,000-square-foot retail shopping center in San Antonio, Texas.

Challenges

The site had a significantly below-market ground lease for 65% of the total gross leasable area with an anchor tenant that had vacated the site. The sponsor was negotiating a buyout with the tenant that made underwriting difficult for creditors as the NOI would immediately decrease upon the termination of the ground lease. However, there was significant potential to increase the cash flow exponentially after lease-up. The use restrictions imposed by the dark anchor made identifying a replacement tenant difficult and, as a result, lenders were concerned about potential vacancy considering the large footprint of the anchor lease. The sponsor required a short timeframe to close in order to meet the purchase and sales agreement timing clause.

Solutions

Identified a lender who was willing to structure an earn-out, TI/LC holdback, and capital reserves to carry the property through the transitional period post-closing and termination of the ground lease. Additionally, structured a JV equity partnership with a foreign fund manager looking for a higher current yield than what was available in core coastal markets.

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Seth Schumer

MANAGING DIRECTOR

Seth Schumer joined Eyzenberg & Company as a Managing Director. His primary focus is transaction management and structuring advisory for commercial real estate finance transactions.

Prior to joining the firm, Schumer served as Head of US Investments for Quadrum Global (formerly Cube Capital) where he grew platform from one US hotel investment to an 18-asset mixed use portfolio through new acquisitions, ground-up developments, team building and creation of three internal operating platforms (Tesseract Investment Advisors, Arlo Hotel Management and Quadrum Senior Living Management). While at Quadrum, Schumer acquired, capitalized and asset managed a hotel portfolio that includes Arlo SoHo, Arlo NoMad, Nautilus South Beach, The Godfrey Hotel Chicago, Essex Inn Chicago, and B Resort & Spa at Walt Disney World, and led the efforts to create an in-house hotel management platform and the new Arlo Hotel brand. He additionally led the efforts to develop a senior housing property and the Amavida brand.

His expertise in debt financing including loan underwriting, servicing and borrower relations was learned while working in London for ABN AMRO, and in New York for Chase Manhattan Bank and Chemical Bank. Whilst at AIG Global Real Estate and Real Estate Capital Partners (now CP Capital), he additionally gained asset management, development insight and JV equity structuring experience. Also, during his time at AIG, Seth was part of team that acquired four RTC loan portfolios.

Schumer holds a master’s degree in real estate investment and development from New York University and a bachelor’s degree in accounting from the University of Maryland.

Email

sschumer@Eyzenberg.com

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