From Ben Van Der Meer at the Sacramento Business Journal:
Ethan Conrad’s latest property purchase has resolved one of the region’s troubled commercial loans. But a new list from Trepp Inc. shows two new properties with potential concern.
Last week, Conrad completed purchase of Granite Bay Village in Granite Bay for about $9 million. The retail center at 8665 Auburn-Folsom Road was 65 percent occupied at the time of sale, according to Conrad.
“Our basic plan with the property is to remodel it and make it look good, as well as promoting an overall feel of affluence to it, given the high-end area in which it’s located,” Conrad said in an email. The loan for the 86,000-square-foot center fell into default in late 2013, when grocer Tesco Fresh & Easy vacated about 15,000 square feet of space.
According to Trepp’s analysis from last fall, the property would need to sell for about $7.5 million to cover the defaulted loan.
Since the sale closed, Conrad said, he’s gotten considerable support from current and potential tenants as well as residents. “Basically, there are a lot of people who are pleased that we bought the property and are remodeling it,” he said.
He said his goal, along with remodeling and improving lighting and landscaping, is to boost center occupancy to about 90 percent.
Trepp’s new list shows possible problems for another Granite Bay property, as well as one in Carmichael.
At 4170 Douglas Blvd., the sole tenant of a two-story office building of 20,500 square feet left three months ago. The loan matures this year and has a balance of about $3 million. According to a commentary in Trepp’s report, the borrower has three prospective tenants and is making upgrades.
A maturing loan is also a concern at 5800 Madison Ave., a 46,237-square-foot retail center. Though over 90 percent is occupied currently, the property has dipped below 70 percent as recently as two years ago. However, Trepp’s report states the property in the middle of a sale, and the loan matured at the beginning of the year. Center tenants include Barebones Workwear and Lumber Jack Furniture.
