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Ross is one of the major tenants at Gilbert Gateway Towne Center. Image courtesy of CBRE
Mega Furniture has obtained $81 million from Citi for the refinancing of Gilbert Gateway Towne Center, a 263,978-square-foot retail property in Gilbert, Ariz., public records show. CBRE arranged the senior loan with fixed interest rates for 5 years. The financing was structured on an interest-only basis for the entire 5-year term to maximize cash flow.
Mega Furniture purchased the Class A asset in 2021 from Vestar, according to CommercialEdge information. The $50.2 million transaction also involved a $37.7 million acquisition loan from Oceanview Life.
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Completed in 2005 at 4900-5052 S. Power Road, Gilbert Gateway Towne Center is shadow-anchored by a Super Target. Its tenant roster features a mix of more than 40 national retailers including Ross, PetSmart, Michael’s and Cost-Plus World Market. Vestar still serves as property manager.
The shopping center is at the highly trafficked intersection of Power Road and Loop 202, across from Phoenix-Mesa Gateway Airport and the Arizona State University Polytechnic Campus. The property is serving a population of more than 243,000 residents within a 5-mile radius.
The Phoenix retail market has seen improvements in tenant demand during the third quarter of this year, according to an Avison Young report. The total vacancy rate dropped 20 basis points over the quarter to 5.1 percent, the lowest on record. At the same time, the metro witnessed positive net absorption for the 12th consecutive quarter, totaling 373,525 square feet.
Financing details
Shaun Moothart, Bruce Francis, Bob Ybarra, Doug Birrell, Nick Santangelo and Jim Korinek with CBRE’s Capital Markets Debt and Structured Finance team secured the non-recourse financing.
Moothart, an executive vice president at CBRE, said in a prepared statement the financing closed during a time of extreme volatility in the capital markets when commercial mortgage-backed security credit spreads were widening and treasury bond yields were rising simultaneously. Those headwinds put pressure on loan proceeds due to debt service constraints.
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