18M Finances 55,000-SF Ralphs Supermarket

SANTA MONICA, CA-Affiliates of Robertson Properties Group have secured a $17.5 million loan through El Segundo-based Venture West Funding for a 55,000-sf Ralphs supermarket. The single-tenant property is at 1644 Cloverfield Blvd., reports Matt Douglas of Venture West.

The financing is a 10-year fixed, nonrecourse loan for the owner at “a very competitive rate,” according to Douglas, who arranged the funding through Washington Mutual Bank within six weeks. He notes that this is the first financing for the property, which the owners bought for all cash in August 2007 at a price of more than $29 million.

In light of the credit crunch, Venture West looked at several potential funding sources for the deal, Douglas says. “We have found that some banks are open to larger, single-tenant loans, while others–even at the same large amount–prefer properties with multiple tenants,” he notes. “Lenders are changing their loan policies and adjusting the mix in their portfolios.”

The Ralphs property is located within a Westside retail market where a lack of developable land and the high costs associated with building retail space in the Westside Cities have resulted in very modest expansion in area, keeping demand strong, according to a recent retail report by Marcus & Millichap for the second quarter of 2008. The report notes that, in the past 12 months, builders have brought online only 170,000 sf of new space.

The development pipeline “remains thin,” the report adds, with roughly 190,000 sf in planning stages. Most of the proposed projects contain less than 30,000 sf of retail space.