Peter Pays Paul

Sunvalley Shopping Center, in what will likely be a boost for East Bay retail, will add some major new retailers this year and next, including a Forever 21 mega-store at the Concord mall.

The new retailers are XXI — the mega-store for the Forever 21 brand — A’GACI and Jessica McClintock. All these stores cater to young women.

via Sunvalley mall bags 2 new retailers for young women – ContraCostaTimes.com.

The Contra Costa Times is reporting on the New plan for Neiman Marcus in Walnut Creek.

The plans from Macerich detail a store almost 15,000 square feet smaller and only two stories tall.

The earlier proposal for a 107,000 square-foot project met with disapproval of the local community as it planned to exceed the local height limit.

The Contra Costa Times is reporting that Fresh & Easy grocery store is delaying their planned expansion into Northern California and the Bay Area. Fresh & Easy styles itself as a smaller supermarket that insists on fresh food and quality produce.

The article states optimism about the future of the expansion plans for Fresh & Easy. I think that because of public distrust of publicly traded companies, some shoppers may prefer a local, known grocer/shopkeeper to a chain store. This could be a benefit for the smaller Fresh & Easy markets.

However, this may be a sign that people are less willing to spend extra money on “luxury” type food items. Whole Foods has seen a downturn in the present market.

Fresh & Easy delays local expansion – ContraCostaTimes.com.

The Golden State is going to be in for a rough year. The Associated Press is reporting that the state may deliver just 15 percent of the requested amount to California cities and farms.

Calif. to cut water deliveries to cities, farms – Yahoo! News.

Fewer crops may be planted if there is no water for the crops. In economic terms this could mean higher prices for some of the every day food stuffs that Californians enjoy.

Californians had better pray for rain.

Michael Stoler of the New York Sun has written an article about our industry. (HT: The Dirt Lawyer)

Mr. Stoler accurately states that for new or inexperienced developers the sources of capital are few and far between. He writes:

“The answer for a growing number of these borrowers is alternative, or specialty, lenders that provide financing at higher rates and with stricter conditions.”

Still Lending

While the credit crunch has decreased the supply of funds, specialty lenders are still willing to lend on the right deal. Specialty lenders can be hard money lenders or hedge funds.

In order to obtain a loan from these specialty lenders, borrowers should have lots of cash and a solid project grounded in reality, not the past boom market. Mezzanine lenders and joint venture funds help borrowers with limited cash acquire the necessary equity to gain financing.

Borrowers should expect a rate in the double digits and higher fees to pay for the speed that specialty lenders provide.

If you need specialty financing, please feel free to call me at (925) 280-5388.