Laurel Centre Mall

Transaction Overview
Property Type: Regional shopping mall
Transaction: Note acquisition

Transaction Background
Laurel Centre Mall is a 661,000 square foot regional mall anchored by Burlington Coat Factory, Hecht's and International Furnitures. The center has 113 in-line specialty stores totaling approximately 245,176 square feet. Completed in 1979, Laurel Center was improved with a 13 station food court in 1988 and was renovated in 1991.

CBA purchased Kemper's 76% interest in a zero-coupon first mortgage and 100% interest in a second mortgage secured by Laurel Centre Mall. Both were included in CBA's $541 million 1993 CBA-C1 securitization. A Lehman Brothers affiliate retained the remaining 24% of the first mortgage. The mall was owned by Shopco Laurel Owners (Shopco), a publicly traded partnership controlled by Lehman Brothers.

Transaction Summary
When the mortgage obligations matured in October 1996, Shopco opted to default. CBA, who closely monitors the performance of its 1993 securitization, extensively reviewed the property and determined that the asset provided an excellent equity opportunity for investment. Then, on behalf of the REMIC Trustee, Stanley Cheslock was appointed receiver of the property and negotiated a Settlement Agreement with Shopco.

Subsequently, CBA teamed up with Apollo Real Estate Advisors and purchased each of the defaulted notes at par from the Trust and foreclosed on the property. The note purchases protected the interests of the subordinate bond holders in the 1993 securitization. Currently, Laurel Mall is owned by CBA and Apollo and is being managed by Simpson Properties, Inc.