RCA in the commercial property press:

Sale of Berkeley Place could be best thing for center's success, experts say

Island Packet (SC) reports: The owner of Berkeley Place shopping center and Sea Turtle Cinemas in Bluffton probably won't be able to refinance the $23.5 million loan on which it has defaulted, an analyst of high-dollar commercial real estate said Friday.

Banks haven't been willing to help borrowers with big, troubled loans recently, said Jessica Ruderman, senior analyst at Real Capital Analytics, which tracks commercial real estate deals and sales of more than $5 million.

"We're not really seeing that too much because there's not much money being lent," she said.

That means Bluffton's Berkeley Place could sell at a discount of as much as 30 to 40 percent if it's moved to repay the loan, Ruderman said. Sea Turtle Entertainment owes Wells Fargo more than $27.3 million, the bank claimed in Beaufort County court records.

The bank initiated foreclosure proceedings, and a judge appointed Charlotte commercial real estate firm Faison & Associates to run the center and look for a buyer, pending the approval of the bank and the court. Faison officials could not be reached for comment Friday.

Sea Turtle managing partner Lori Kaylor said earlier this week the owner is "working on a solution." She did not elaborate.

Similar situations are becoming more frequent at shopping centers nationwide, Ruderman said. Her firm counts $98 billion worth of commercial property in some state of financial trouble, she said.

Almost a third of that is retail property, considerably more than other segments, such as apartment, office and industrial properties.

"Retail is definitely the worst right now," Ruderman said.

In the case of Berkeley Place, Ruderman said, an optimistic scenario might be that a new buyer gets the center at a good price. If that were to happen, the new owner could weather some vacancies and make improvements, so the center would be more attractive to shoppers and potential tenants once the recession ebbs, Ruderman said.

In a more grim scenario, the center could continue to struggle if a new buyer can't fill storefronts that have sat vacant under Sea Turtle's management, Ruderman said.

One longtime local commercial real estate broker said the pace of residential growth in the area could help determine the center's future, regardless of who owns it.