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Commercial Real Estate Alliance of San Diego's Deal Makers of the Year

Retail sales/leases finalists

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Don Curtis, Greg Brown
HFF LP
Encinitas Village, 105-133 North Camino Real, Encinitas
183,675 square feet
Total consideration: $43 million loan price

About the property:
In February 2012, HFF successfully closed a $43 million loan for Terramar Retail Centers LLC secured by Encinitas Village, a 183,675-square-foot neighborhood retail center located in Encinitas. Terramar Retail Centers is a privately held commercial investment, management and development company that owns high-quality shopping centers that provide stable cash flow and create significant economic, cultural and social value. Terramar currently owns and operates 25 properties totaling more than 4.1 million square feet.

Closing the deal:
Encinitas Village is anchored by a Ralphs grocery store and Trader Joe’s, making it a attractive investment. As such, the purchase price of $78.65 million represented an aggressive cap rate and price-per-square-foot. Many lenders could not offer significant leverage, due to underwriting constraints. In addition, most life insurance companies are based outside of California and were not familiar with this location and the market demographics.

However, HFF was able to find a life insurance company that understood the long term objectives of Terramar, and was able to provide data and background on the location and demand drivers and secure a favorable loan amount and interest rate for a ten-year fixed rate loan. HFF spent significant time with the lender touring the property and the surrounding area, which enabled them to thoroughly understand the long-term benefits of Encinitas Village and ultimately issue the loan.

As a result of having significant relationships with several life insurance company lenders and providing a high level of local market knowledge, HFF was able to find the right lender for this property. HFF deserves to be the deal maker of the year for Encinitas Village, due to the fact that the HFF team took the time to thoroughly understand and explain the demand drivers of the property in order to obtain extremely favorable long-term financing for the client. HFF’s approach of always placing the client’s needs first and providing a high level of service throughout the entire financing process has allowed them to develop very strong relationships with clients and capital providers.

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