With big improvements in leasing, Ethan Conrad has refinanced the loan on a Foothill Farms shopping center to invest elsewhere.
Los Angeles-based Continental Partners secured $11.9 million in refinancing for the center at 5400 Date Ave., a 152,719-square-foot property. Sleep Train and Cycle Gear are two of the more prominent tenants in the center, which is visible from nearby Interstate 80.
J.M. Grimaldi, Continental Partners’ executive vice president, said when Conrad acquired the property in 2013, it was only 57 percent occupied.
“What speaks to us is the way he was able to attract tenancy,” Grimaldi said, adding the center is now 93 percent occupied after renovations. The most recent new lease is to CircusTrix, which operates indoor trampoline parks.
While retail leasing overall is stronger than three years ago, that’s not the only factor that helped the center, Grimaldi said. With online competition affecting soft-goods stores, specialty destination retail like CircusTrix is filling the gap left by big boxes, he said.
“There are actually new tenants figuring out a way to fill these spaces,” he said.
In Continental’s Southern California home base, developers are building outdoor retail destinations where people spend hours on experiences and a meal, rather than popping in to buy one item and then leaving, he said.
Grimaldi, whose company worked with Conrad on similar financing deals earlier this year under the name Continental Funding Group, said Conrad is parlaying his improved equity from 5400 Date Ave. into other ventures. Conrad typically buys commercial properties at bargain rates, then works on improvements and leasing before using equity from those improvements for new purchases.
The new loan, generated with a specialized money lender, benefits Conrad more like a secured money market account than other types of financing, he said.
The loan also comes with a locked-in interest rate for the next seven years.
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