Westfield Garden State Plaza gets refinanced via new SASB deal along with valuation cut

About USD 525m of CMBS debt backing Westfield Garden State Plaza mall in Paramus, NJ has been paid off at maturity, according to loan balance data and updates on Trepp. This comes as the 2.1m sq ft mall secured new financing in the form of a USD 525m non-recourse, first-lien mortgage loan that includes a USD 425m SASB CMBS deal in NJ 2023-GSP, a release by KBRA and Trepp data showed.

At the same time, the mall’s appraisal value has been lowered to USD 1.81bn (at 28.9% LTV) in the new SASB deal from USD 2.1bn (at 25% LTV) in the previous securitizations in WFRBS 2013-C18 and RBSCF 2013-GSP, Trepp data showed.

Moreover, KBRA values the property at about USD 1.2bn (at 43.1% LTV) or about 33% below the appraiser’s as-is value. KBRA noted that its analysis yielded a net cash flow (KNCF) for the property of approximately USD 92.8m, 11.4% below the issuer’s NCF.

The previous CMBS debt was placed on the watchlist ahead of its maturity on 1 January, according to servicer commentary on Trepp. The borrower previously announced plans to pay off the loan at or before maturity, December servicer commentary showed.

Meanwhile, Goldman Sachs acted as the lead manager on the new SASB deal, with an origination date of 1 December 2023 and maturity in October 2029, as per data on Trepp. KBRA noted that the USD 525m mortgage loan was expectedly originated by Goldman Sachs Bank USA, German American Capital Corporation, and Natixis Real Estate Capital on or about 11 December 2023.

The loan is secured by the borrower’s fee simple interest in Westfield Garden State Plaza, of which 1.2 million sq ft serves as collateral for the SASB loan. As of September 2023, the space serving as collateral was 81.3% leased to over 300 unique tenants.

The three largest tenants at the property are Nordstrom (245,348 sq ft expiring July 2026), Neiman Marcus (141,139 sq ft expiring August 2041, and AMC (95,818 sq ft expiring May 2027), Trepp data showed.

Watergate Office Building debt turns more than 60 days delinquent

The USD 73m of CMBS debt backing the iconic Watergate Office Building in BMARK 2019-B14 has turned 60 days delinquent as it missed its scheduled payments in October and November, as per servicer commentary and data on Trepp. According to a Commercial Observer report, the delinquency was driven by the exit of a crucial tenant, Sage Publications.

Trepp data showed that as of September, the Washington DC building was 78% occupied with DSCR (NCF) of 1.60x compared to 100% occupancy in FY22 with 1.53x DSCR NCF. A lockbox was activated in September 2023 due to a failure to meet the required 6.25% debt yield hurdle. The most recent appraisal valued the property at USD 105m (69.5% LTV).

The 215,200 sq ft property, famous for the 1972 burglary that led to President Richard Nixon’s resignation, backs about 5% of BMARK 2019-B14, per Trepp data.

As per the Commercial Observer report, problems at the property followed close on the heels of Friedman Capital‘s acquisition of the building in September 2019 for USD 102m, months before the onset of the COVID-19 pandemic. The property’s struggles intensified when The Atlantic relocated from the Watergate building to a new space at The Wharf in late 2020, the report added.

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