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Mall developers secure $160M.

"Have tenants will travel" is the slogan for the 90's.

Such was the message last week when the developers of a proposed mall in White Plains closed on $160 million in construction financing.

"The Westchester", as the $250 million project will be called, is significantly pre-leased. Nordstrom has agreed to build a 200,000-square-foot store, its first in New York, and there are commitments from some 18 other national specialty retailers, including: The Limited, LimitedExpress, Abercrombie & Fitch, Williams Sonoma and many others. An existing Neiman Marcus will be refurbished and become part of the complex.

The 1 million-square-foot-plus mall, located at Bloomingdale Road and Westchester Avenue, is a development of Fashion Mall Partners, a partnership of The O'Connor Group, Nomura Real Estate, Ltd., represented by Eastdil Realty, Inc., and Mall Properties, Inc.

The financing was arranged by Eastdil Realty, represented by Thomas Flexnet, senior vice president, and David Robinov, vice president.

According to Flexner, the lenders are an international consortium, comprised of four banks from three continents: Asia, Europe and North America. There are no U.S. banks or Mexican lending institutions involved, he said.

The transaction was significant, Flexnet said, not only because a construction loan of this size has not been seen for some time, but because it involved four major money center banks from beginning to end. Traditionally, he said, one bank would take the lead and then later sell participation. In this deal, he said, there were two co-agents and Eastdil had to simultaneously "line up the contracts and documents" for all four lenders.

"We had to line up all the banks upfront," he said.

Flexnet said the presence of tenants was, indeed, an important factor in the lenders' decision. 'We had a fairly high preleasing threshold,' he said.

Shopping centers, especially the larger, regional variety, are finding some renewed favor with lenders, says Metric Frankel, a director in Cushman & Wakefield's Finance Group. Preleasing, like more than half, however, she said, is key.

"It is absolutely critical," she said. " [Lenders] want significant pre-leasing and anchor tenants. A lot of them tell me they want good, well-known chains."

The O'Connor Group owns 13 shopping centers across the country, and they have financial interest in others. In 1991, they unveiled their latest project, the 1.3 million-sQuare-foot revamped Menlo Park Mall, Edison Park, New Jersey. The

retail colossus is anchored by Nordstrom and Macy's.

The Nordstrom store will rise on the site of a former B. Altman's and it will be bridged to the existing Neiman Marcus with a three-level Mall. In all there will be 150 retailers.

A spokesperson for the O'Connor Group said construction is due to start immediately and that completion is slated for late fall of 1994.

Construction managers are WhitingTurner from Connecticut. The architect for the mall is RTKL Associates, Dallas, and the architect for Nordstrom is The Callison Partnership of Seattle.
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Title Annotation:Fashion Mall Partners receive $160 million for construction financing for The Westchester shopping mall in New York
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Jan 6, 1993
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