Two Silicon Valley Retail Centers Refinance

SAN JOSE-Two Silicon Valley retail centers have been refinanced in separate deals with a combined value of more than $30 million.

RBS Greenwich Capital funded a $20.9-million loan for the 99,564-sf Lion Plaza Retail Center, an Asian-themed center in San Jose. Located at the confluence of King and Tully roads, the property is anchored by the Lion’s supermarket chain and includes office space over the ground-floor retail space. The 10-year loan has a 30-year amortization schedule.

In the other deal, GE Asset Management funded two loans totaling $11.8 million for Stevens Creek Plaza and Stevens Creek Villas in Santa Clara. The Villas is a 39-unit apartment project that sits above Stevens Creek Plaza, a 76,684-sf retail center anchored by Bed, Bath and Beyond. The two 25-year loans–$7.5 million for the retail and $4.3 million for the apartments–were taken out by an entity of De Anza Properties.

Mitchell Zeemont of Newmark Realty Capital Inc. sourced all three loans. Zeemont did not return a phone call Wednesday seeking further comment. According to the latest report from the brokerage firm Marcus & Millichap, apartment vacancy in the San Jose MSA fell 0.2 percentage points in the first quarter to 6.4%. Average asking rents fell 1.46% in the first quarter to $1,352 and are off 6.63% over the past year, “but this is a substantial slowing from the precipitous drop recorded in 2001,” states the report, which notes that the MSA has lost 100,000 jobs over the past two years.

The median sales prices, meanwhile, after topping out in the range of $160,000 per unit in 2000, has fallen 6.29% over the past 12 months to $128,289 per unit. Ric Russell, regional manager in Marcus & Millichap’s Palo Alto office says that with all this in mind, San Jose-area “investors are locking in low interest rates to be in position to take advantage” whenever the rental market does finally rebound.