$141M Financing Deal Closes for North Carolina Shopping Center

June 28, 2007
By Barbra Murray, Contributing Editor

Financing to the tune of nearly $141.2 million has been put in place for the highly successful, 577,000-square-foot North Hills Lifestyle Center in Raleigh, N.C. CBRE | Melody, the real estate banking division of real estate services firm CB Richard Ellis Inc., orchestrated the transaction on behalf of Kane Realty Corp., developer and owner of the retail property.

North Hills is part of a greater mixed-use project by Kane that occupies land the company acquired for $16 million in 2001. The site had once been home to the Triangle area's first enclosed mall. North Hills first opened its doors to shoppers in 2004, and is currently leased to near maximum capacity. The property (pictured), which consists of 13 structures housing such tenants as JC Penney and Regal Cinema, includes 100,000 square feet of office space. Financing for North Hills came in the form of a 10-year interest-only loan at a fixed rate of 6.01 percent from JP Morgan Chase. The loan replaces a $105 million loan provided by Archon Financial in 2005.


"We suggested Kane take out the loan because the market value of the property increased substantially so that it is able to carry a mortgage this size," CBRE | Melody senior director Mark Fisher told CPN. "Kane created this value by continuing to develop this area of Raleigh. They took an old, tired mall, developed around it, built a new mall; an office building and hotel are currently under construction. And now, they're moving across the street for more development, which will further increase the value of the collateral." Kane's adjacent project, North Hills East, will occupy 50-acres and will encompass office, retail, apartments and senior housing elements. "Kane is doing extensive development in this area, and the financing will be used to seed that."

Headquartered in Raleigh, Kane focuses on the development and management of high-quality retail and mixed-use properties throughout North Carolina.

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