Market Snapshot: Fletcher Heights Marketplace

VIZZDA—August 1^st, 2012 – The sale and notice of two properties within the same neighborhood shopping center in Peoria highlight the uneven pace of recovery in the retail sector in Northwest Phoenix, as well as the roll of securitization (CMBS) in both the appreciation and rapid decline of values. The subject retail center, Fletcher Heights Marketplace, was built in 2002 at the Southeast corner of 83^rd Avenue and Lake Pleasant Parkway in Peoria and features a 57,860 SF anchor space owned and occupied by Safeway. and access to several recently developed master-planned communities including the eponymous Fletcher Heights. Three of the ten originally platted lots changed hands on Thursday and Friday of last week- reflecting more than half of the available non-anchor space.

The first of these properties, Lot Eight, is a 9,291 SF pad built 2005 on 1.06 net acres zoned PAD. It was acquired May 10^th, 2004 by a syndicate formed by David Stapleton, Barry Light and Michael Feldman for $550k with $375k down and $175k new debt with Marine Bank, released May 23^rd, 2005. Prior to that release, the syndicate then further encumbered the property with a $1.75m deed of trust with Los Padres Bank which as assigned to Valley Oaks Bank before finally being released January 2^nd, 2007. This debt was replaced by a Morgan Stanley deed of trust that was issued November 2^nd, 2006, securitized sometime thereafter and assigned as a collateralized security to Wells Fargo Bank on March 21^st, 2007. Friday’s sale price of $960k reflects an annual rate of return greater than 9% as well as terminating all obligations of the selling syndicate.

The second active property within Fletcher Heights Marketplace last week included Lots Six and Seven. The non-contiguous inline spaces total 27,016 SF and were constructed with the anchor space in 2002. They sit on a combined 3.95. Fred C Smith originally acquired the property for $7.1m with $5.68m new debt with Lehman Brothers Bank on June 24^th, 2003. Lehman securitized the note and assigned it to Lasalle Bank (CMBS) on February 9^th, 2004. On October 5^th, 2005, Smith sold the property to David Christenholz et al for $7.7m; with $2,161,247 down and assumption of the LaSalle $5.68m CMBS note. On July 20^th, 2006, Christenholz sold the property to Thomas H Dye, et al. for $9.5m with $4,075,010 down and assumption of the CMBS debt, now held by Bank of America as successor-by-merger to Lasalle Bank. Finally, Bank of America assigned the $5.68m original note to US Bank on July 12^th, 2012. US Bank noticed the property for trustee sale July 26^th, 2012, naming Fred C. Smith as trustor despite the property selling two additional times and assumption of debt.

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BY:
Paul Dionne

Research Analyst

pdionne@vizzda.com

Hadden Schifman
Managing Director

Hadden@VIZZDA.com