Linder Village
Overview
| Deal Type | Debt Capital Markets |
|---|---|
| Size |
$28.5 Million Sales Tax TIF Revenue Bonds |
| Client & Transactional Partners | DMG Real Estate Partners | Our Role | Sole Manager |
Summary
The Arizona Industrial Development Authority (the "Developer") issued approximately $28.5 Million of tax-exempt development revenue bonds (the "Bonds") to finance infrastructure improvements surrounding the Linder Village (now known as Orchard Park) development (the "Development") in Meridian, Idaho. The Development will be anchored by a WinCo grocery and at full build out will include over 315,000 square feet of retail offerings. KeyBanc Capital Markets ("KBCM") acted as Sole Manager on the transaction.
The Bonds were sold pre-construction and are secured solely by sales taxes generated by the businesses to be constructed at the Development. The financing is fully non-recourse to the Developer. Typically, investors require 100% pre-leasing for any businesses generating the projected sales tax revenues. However, since the Developer needed funds for infrastructure improvements before all leases were secured, KBCM devised a tranche structure whereby funds would be escrowed on a proportional basis and released post closing. As a result, the Developer received about 50% of the bond proceeds up front and will receive the balance as leases are produced, ensuring execution.
The bond sale came during the midst of the coronavirus pandemic when many traditional high-yield investors were not participating in the market. Despite those headwinds, KBCM was able to generate sufficient interest to price the bonds at a blended yield of 5.25%.
