Boston Attack Exposure

The explosions in Boston are horrific and will go down as another sad day in this country's history.


However, staring at CMBS loans all day leads my thoughts immediately to potential exposure. It is probably a little too soon, but nonetheless there are likely to be lasting consequences to the impacted area.

The two primary explosions that caused the most damage were in the 600 and 700 blocks of Boylston Street (specifically the addresses listed were 671 and 755). The only CMBS property in the immediate vicinity is the 761- 793 Boylston Street loan in CGCMT 2007-C6, representing 0.24% of the deal. In the horrific photos, which are widely available elsewhere, you'll notice a line of stores behind the aftermath starting with a Crate & Barrel on the left side (West) of the images, and continuing right (East) you'll see an Atlantic Fish Co, Forum (the blast appeared to be centered here), and Starbucks. The building with the Crate & Barrel and all the buildings to the left (West) of it back to Fairfield Street are part of this collateral property.

Only three other loans have properties within a few blocks, and both are approximately 1-3 blocks away from the attacks:
GSMS 2007-EOP - 500 Boylston (JV) (I don't *think* this has been released)
CGCMT 2007-C6 - The Wesleyan Building (0.20% of deal)
JPMCC 2007-LD11 - 399 Boylston (1.45% of deal)

Each of these are office and less likely to be impacted then street level retail.

Accor sells Motel 6 to Blackstone for $1.9 billion

Blackstone just agreed to buy Motel 6 from Accor SA for $1.9 billion dollars with a target close date in October 2012. The deal includes the 604 company owned hotels (my guesstimate at 97 keys per property puts that at 58,588 keys or $32,429 per key in terms of real property purchased only) and the franchise business from the 480 franchisees, and an additional 18 properties that were undefined (but this could be the Studio 6 brand that was part of the deal). The total deal value would have come in at $17,699 per key, but keep in mind that includes the Franchise and they're not actually buying that real estate. The WSJ published $25k per key, but I'm not sure how they got there. Looking at it from another angle, the price reflected a 9.3x 2011 EBITDA multiple.

JP and Deutsche Bank are providing the debt package, and I wouldn't be surprised to see it in the CMBS market in the near future.

Other interesting facts:

1. Accor originally purchased Motel 6 from KKR in 1990. 
2. Colony Capital owns a 21% stake in Accor.
3. Accor SA sold Red Roof Inns to a domestic investor group in 2007, right at the peak, and the $366mm CMBS senior mortgage from that deal ultimately defaulted in 2009, ultimately resulting in a 48% loss severity just one short year ago.
4. This almost completely removes Accor from the US market (other than Sofitel brands), but they have a substantial base internationally. The US now represents 1% of their total rooms - Europe= 56%; Asia Pacific = 28%. They even have a footnote stating that 35% of the hotel portfolio is in Emerging Markets - apparently roughly half of their pipeline is in Asia Pacific.
5. Reduces the percentage of owned rooms (versus leased, franchise, and just under management) to 10% of their total key count of 427,800 keys

The englais version of Accor SA's investor presentation on the Motel 6 disposal is here.


The current exposure to Motel 6 in CMBS is a little hard for me to gauge, and I'm sure I am missing some. It looks like the entered into a number of 20 year balloons and blocked off the properties in to SPEs with names like Mountain S9, East S9, etc. corresponding to their region. This is definitely not all of the debt associated with the hotels, though, because Accor noted in their press release that Blackstone is assuming €330mm in debt and fixed-lease commitments of €525mm - the debt below is listed with original face values (and it has amortized substantially in most cases) and only adds up to around €130mm using the original face and just a few dozen properties.

1. Accor- California South loan ($11.5mm) in CSFB 2001-CF2, which only covers 4 properties and matures in 2019. 
2.  Accor - Mountain Summary ($26.8mm) CSFB 1999-C1 is listed as a CTL so it's probably some master lease over a few properties. Matures in 2019.
3. Accor - California North Summary ($14.2mm) CSFB 1999-C1 with a 2019 maturity.
4. Accor - East Summary ($14.5mm) CSFB 1998-C2. 5 properties. 2019 maturity.
5. Accor - SouthEast Summary ($13.8mm) CSFB 1998-C2. 4 properties. 2019 maturity.
6. Accor - West Summary ($13.2mm). CSFB 1998-C2. 3 properties. 2019 maturity.
7. Accor - Texas Summary ($30.3mm) CSFB 1998-C2. 6 properties. 2019 maturity.
8. Accor - Florida Summary ($19.2mm). CSFB 1998-C2. 4 properties.2019 maturity.
9. Accor - Midwest Summary ($15.7mm). CSFB 1998-C2. 5 properties. 2019 maturity.
10. There are a couple of other non-defeased Motel 6 loans, but they look like franchises.

Best Buy Closure List

Following their initial announcement on 3/30, Best Buy posted a closure list, and surprisingly I only found 1 of the outstanding loans in CMBS deals. I may be off, because I am not attempting to do a thorough and complete job here, but I did for all loans named Best Buy that had matches on the city name from the list provided by Best Buy - then I further filtered the list by visually checking the street names. I'm sure some analyst who is actually getting paid to do research like this will post an update some day this week, but in the meantime please check out my advertisers!

Best Buy's official list here.

The Matteson store highlighted below is in BSCMS 2002-TOP6 as Best Buy Portfolio - Matteson IL (II) and actually paid of 6 months ago (but I listed it here just so we can all ponder on the horrible timing of that decision), and the West Dundee store listed below is in MLCFC 2006-3 as Best Buy West Dundee.

Store Name	Address	City	State
Casa Grande	1004 N Promenade Pwy	Casa Grande	AZ
Lake Pleasant	10134 W Happy Valley Rd	Peoria	AZ
East Palo Alto	1751 E Bayshore Rd	East Palo Alto	CA
Westwood	10861 Weyburn Ave	Los Angeles	CA
Manteca	934 Perimeter Dr	Manteca	CA
Moreno Valley East	27220 Eucalyptus	Moreno Valley	CA
Ontario	4120 E 4th St	Ontario	CA
Pittsburg	4405 Century Blvd	Pittsburg	CA
Jamboree	2857 Park Ave	Tustin	CA
Arapahoe & Parker	15800 E Briarwood Cir	Aurora	CO
The Forum	9370 Dynasty Dr	Fort Myers	FL
Oldsmar	11655 W Hillsborough Ave	Tampa	FL
Fayetteville	128 Pavilion Pkwy	Fayetteville	GA
Loganville	4014 Atlanta Hwy	Loganville	GA
Addison	1038 N Rohlwing Rd	Addison	IL
87th & Dan Ryan	8900 S Lafayette Ave	Chicago	IL
Deerfield	200 S Waukegan Rd	Deerfield	IL
Matteson	4707 Lincoln Mall Dr	Matteson	IL
Mundelein	1100 N Rt 83	Mundelein	IL
West Dundee	979 W Main St	West Dundee	IL
Speedway	10500 Parallel Pkwy	Kansas City	KS
Back Bay	360 Newbury St	Boston	MA
Wareham	2421 Cranberry Hwy	Wareham	MA
Inner Harbor	600 E Pratt St	Baltimore	MD
Hunt Valley	118 Shawan Rd	Hunt Valley	MD
Biddeford	405 Mariner Way	Biddeford	ME
*Brooklyn Center	5925 Earle Brown Dr	Brooklyn Center	MN
*Edina	3200 Southdale Cir	Edina	MN
*Hutchinson	1350 Hwy 15 S	Hutchinson	MN
*Lakeville	18350 Orchard Trl	Lakeville	MN
Rochester South	4540 Maine Ave Se	Rochester	MN
*Rogers	20870 Rogers Dr	Rogers	MN
Ellisville	15678 Manchester Rd	Ellisville	MO
Monroe	3151 W Highway 74	Monroe	NC
Rocky Mount	1100 N Wesleyan Blvd	Rocky Mount	NC
Millard	12210 K Plz	Omaha	NE
East River Plaza	517 E 117th St	New York	NY
Steelyard Commons	3506 Steelyard Dr	Cleveland	OH
Salem Mall	5031 Salem Ave	Dayton	OH
Caguas	Las Americas Expry PR52 Zafiro	Caguas	PR
Middletown	890 W Main Rd	Middletown	RI
Hickory Hollow	5255 Hickory Hollow Pkwy	Antioch	TN
Techridge	12901 North I-35	Austin	TX
*Woodlake Parkway	6218 Woodglen	San Antonio	TX
Landmark Mall	5901 Stevenson Ave	Alexandria	VA
Cosner's Corner	9745 Jefferson Davis Hwy	Fredericksburg	VA
East Richmond	4410 S Laburnum Ave	Richmond	VA
Mill Plain	16611 Se Mill Plain Blvd	Vancouver	WA
* indicates stores notified March 29, 2012 of closure plans
Note: Two stores in Kansas City, MO (Metro North) and Scottsdale, AZ (Shea) permanently closed in February 2012.

Best Bye

Best Buy is planning on saying Good Bye to 50 of it's standard format stores and opening 100 smaller format stores in 2013. They did not release a list of the stores in their conference call materials, and indicated the list would come out much later.

Delhaize Closures (aka Food Lion, Bloom and Bottom Dollar)

The WSJ reported nearly 3 weeks ago that Delhaize was closing stores, and made a great little list (see link), which I fully intended to go through and match up to grocery-anchored strip centers in CMBS deals. Also, the folks over at CRE Console put together a nice little map.

Life got in the way of my plans and I never got around to it. If you have a good CMBS exposure list, please send it over and I will append my quick cursory search results below. PLEASE NOTE that the results below are only matched on city name and partial street address match - so, if their list says the city is New York, and the loan file says Brooklyn, then it's not include. Also, if the both places list New York but one says 123 Apple Street NW and the other says 123 Apple Street SE, then it is erroneously considered a match here.


I retrieved 10 potential matches on the first run out of a total of 590 CMBS properties with Delhaize, Food Lion, Bloom, or Bottom Dollar in the name.

Property Name	Deal
Weaverville Plaza	NASC 1998-D6
Belle Station	BSCMS 2002-PBW1
Northwest Commons Shopping Center	JPMCC 2002-CIB4
DeBarry Place Shopping Center	JPMCC 2004-C1
Lanier Commons Shopping Center	SBM7 2001-C1
Anchor Plaza	CGCMT 2005-C3
Cloud Springs Plaza	MLCFC 2006-1
Ashburn Town Center (A)	MSC 2004-IQ7
Ashburn Town Center (B)	MSC 2004-IQ7
Eisenhower Square	WFDB 2011-BXR

Macy's Closures

On the 4th day of every year, the executives at Macy's have a little ritual that involves a little slap and tickle in the board room followed by a ceremonial closure of stores sure to crush already underperforming malls and dash the hopes and dreams of adjacent in-line retailers. This year was no exception as they announced the closure of 5 Macy's and 4 Bloomingdales, all of which will have going out of business sales for 10 weeks before shuttering their doors forever. The List is below.

Macy's:
Parmatown Mall (aka Parmatown Shopping Center) in GMACC 2004-C2 is already in the hands of a receiver, and in late 2011 the receiver identified "critical life safety capital improvements" that were needed immediately. A March 2011 appraisal pegged the value at $29.7mm, substantially below the $62.4mm in outstanding senior mortgage.

Simon - West Ridge Mall is in BACM 2004-4 and represents 11.15% of the deal. The loan has been on and off the watchlist for low DSCR in 2011 and the most recently reported DSCR was 3Q 2011 @ 1.17x with 85% occupancy. Unfortunately Macy's is the premier anchor at the mall in terms of its location in relation to in-line retailers who will get crushed in the near-term; fortunately, Macy's is in the premier anchor at the mall and hopefully Simon can repopulate the dark space relatively quickly. The mall does have other problems - namely the other anchors, which are Sears (ugh), Burlington Coat Factory (never been in one, but what do they sell when it's not winter?), and JC Penney.
Although Hickory Hollow is not in a CMBS deal, there is an unanchored shopping center adjacent to the mall that is in BSCMS 2002-PBW1 that represents 0.24% of the deal. That property is not in default, but it's struggling.

Bloomingdale's:
Mall of America is the big one here, with Bloomingdale's accounting for 7.90% of the sf (expires 8/2012). The Mall also has a Macy's (9.99%). Other than this tenant, the mall has performed well with 3Q 2011 DSCR at 1.71x and occupancy at 91%. The loan is in three CMBS deals: CD 2007-CD4 (4.85%), GECMC 2007-C1 (3.11%(), and COMM 2006-C8 (10.82%).

White Flint does not have any direct exposure, but the Lord and Taylor pad within this mall is in the Lord & Taylor Portfolio in MLFT 2006-1. Just one more bullet for this property to absorb.

Mall	CMBS Deal	Exposure	Store	City	State
Mall of the Mainland			Macy's	Texas City	TX
Parmatown Mall	GMACC 2004-C2	8.67%	Macy's	Parma	OH
Hickory Hollow			Macy's	Antioch	TN
Laurel Mall			Macy's	Laurel	MD
West Ridge Mall	BACM 2004-4	11.15%	Macy's	Topeka	KS
Mall of America	Multiple	see comment	Bloomingdale	Bloomington	MN
Oakbrook Home and Furniture			Bloomingdale	Oak Brook	IL
White Flint			Bloomingdale	North Bethesda	MD
Perimeter Mall			Bloomingdale	Atlanta	GA