Hood Commons

The Project

Hood Commons is a grocery-anchored shopping center which is currently only 72% occupied. The property includes 209,000 square feet of rentable retail space. Built in 1968 and renovated in 1989, the property has suffered from a high vacancy rate since 2002, when several tenants were forced to close their operations at this location. This vacancy has caused a decrease in traffic to the mall and has made it increasingly difficult for the remaining tenants to remain in this location.

Project Financing

UDF’s $10,000,000 loan, along with additional financing provided by other lenders, allows for the purchase of the property and improvements to attract retailers to the spaces that are currently vacant. UDF’s interest-only loan is for a 3-year term and offers the borrowers several flexible or non-conventional features including a below-market interest rate and lower than standard debt service coverage ratio.

The new owners intend to invest approximately $1.9 million of the loan proceeds in capital improvement to the project. This investment, along with the new owner’s experience with distressed properties is expected to decrease the vacancy in a relatively short time. At the end of the three year term of the loan, it is expected that the developer will have finished all project improvements and leased the vacant space, and will be able to refinance at that time.

Community Impact

Hood Commons is located in an area with a 7.6% poverty rate and median income that is 71.6% of the statewide median income. It is also located in a CDFI Fund Hot Zone. The new owners plan to lease up the unoccupied space to bring the property to a stabilized 95% occupancy rate. This will increase the jobs available to local residents, as well as increasing the local tax base and providing needed goods and services. The lease-up of the vacant space is expected to create 14 construction jobs and 86 permanent jobs for residents of the surrounding community.