Senior construction financing, mezzanine debt secured for shopping center

  • The Davies Group at George Smith Partners secured $51.7 million of senior construction loan and $16.2 million of mezzanine debt for CREDE’s ground-up development of Niumalu Marketplace, a grocery-anchored shopping center in Kona. (Courtesy AHL-CREDE/Special to West Hawaii Today)

The Davies Group at Los Angeles-based George Smith Partners, a leading commercial real estate capital markets advisor, arranged both a $51.7 million senior construction loan and $16.2 million in mezzanine debt for the ground-up development of a Safeway-anchored shopping center in Kailua-Kona.

Securing financing on behalf of the sponsor, CREDE (Commercial Real Estate Development Enterprises), the group navigated the unusual complexities of sourcing capital after construction had already begun.

CREDE is commercial real estate development and construction management company founded in 2001 with offices in Northern and Southern California, Dallas, Nashville, Phoenix and Salt Lake City. CREDE focuses on opportunistic developments across the United States and has developed or repositioned over 150 properties since 2001.

“To line up financing for CREDE, we highlighted the need for new retail development in Kona and, specifically, the anchor tenant’s commitment to relocate its store from an adjacent shopping center less than a half mile away,” said George Smith Partners’ Principal and Managing Director Malcolm Davies. “We identified two lenders who not only understood the value of the fee simple land ownership but also the high demand for new retail driven by a shortage in the market.”

Known as Niumalu Marketplace, the project is strategically located on a prominent 20-acre site along Queen Kaahumanu Highway. Construction is underway on the highly anticipated 204,275-square-foot shopping center with completion expected by the end of this year.