A consortium composed of a real estate investment trust and two pension funds is tapping the commercial mortgage bond market to refinance the expansion of a super-regional mall in Hawaii.

On April 17, GPP, the second-largest owner of U.S. shopping malls, AustralianSuper Pty and the Teachers Insurance and Annuity Association of America obtained a $500 million mortgage from Deutsche Bank and Wells Fargo on a 672,581-square-foot portion of the 2.7 million- square-foot Ala Moana Center in Honolulu.

The three sponsors are cashing out $74.3 million, 14.9% of the loan amount, in the process.

The mall expansion is not currently encumbered by any other debt, according to Moody’s Investors Service, which estimates the loan-to-value ratio to be 87.9%.That leaves the sponsors with $554 million of equity after the deal closes.

The loan, which has an initial term of five years and pays only interest (3.802%), and no principal, is being used as collateral for a transaction called DBWF 2018-AMXP. Moody’s expects to assign an Aaa rating to the senior tranche of notes to be issued; there are also four subordinate tranches with ratings ranging from Aa3 to Ba1.

Moody’s presale report is full of superlatives. It calls Ala Moana “the dominant regional mall for Earth’s Pacific region,” and one of the most productive in the world, with in-line sales for tenants less than 10,000 square feet of $1,252 per square foot in 2017.

The new Ewa wing “seamlessly integrates into the larger mall,” which attracts approximately 48 million shoppers a year (roughly 47% of them tourists).

Anchor tenants include Macy’s, Neiman Marcus, Saks Off Fifth and Target; in-line tenants include luxury retailers Louis Vuitton, Cartier, Bottega Veneta and Chanel and national chain retailers J. Crew, Ann Taylor and Sephora.

The mall would be “highly attractive to a large pool of investors both nationally and internationally” should it come to market for sale, according to the rating agency.

Moody’s notes that the “mothership” mall, which does not serve as collateral for this deal, is encumbered with another $1.4 billion of debt. That debt serves as collateral for other mortgage bonds. This results in an implied residual equity of $2.68 billion.

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