Dealmaker: Quantum Capital Arranges $22M in Texas

Quantum Capital, Beverly Hills, Calif., arranged $22.15 million in long-term non-recourse debt to refinance two regional shopping centers in Frisco and San Angelo, Texas.

“The volatility in the energy sector has made financing non-core real assets in Texas more of a challenge,” said Quantum Capital Managing Director Mike Yim, who arranged the financings with partner Jonathan Hakakha. “We were able to mitigate many of the lenders’ concerns by demonstrating our sponsors’ successful track record with each asset along with other industries in the respective markets that would support the centers if the energy sector continued to decline.”

In the larger of the two deals, Quantum secured for TRT-QL Frisco LP, Los Angeles, a $12.9 million non-recourse loan to replace maturing debt on Frisco Plaza, a 62,500-square-foot retail center in Frisco. Though some lenders expressed concerns that one special-use tenant represented a large percentage of the rent roll, the property’s location near the 1.6-million-square-foot Stonebriar Centre in one of Dallas’ wealthiest suburbs appealed to others.

Quantum also secured $9.15 million for another Los Angeles-based investor operating as Rancho Sunset Plaza LP to refinance Sunset Plaza, a 90,000-square-foot regional power center in San Angelo.

The asset on Sunset Drive sits in the center of San Angelo’s one most active retail area with one million square feet of shopping and entertainment space within one square mile. Target, Bed Bath and Beyond, Petco and Ross anchor Sunset Plaza and other major retailers in the area include Lowe’s, Walmart Supercenter and Home Depot.

Yim said both fixed-rate loans were underwritten at 75 percent LTV and priced at close to 250 basis points over the 10-years swaps. The financings also included three years interest-only, which Yim called a difficult task given the properties’ secondary-market locations.