Thorofare Capital has funded a $8,200,000 fixed rate bridge loan for RCP Companies to acquire Madison Square, a super-regional shopping destination strategically located in Madison County at the intersection of one of Huntsville’s most travelled roads, Research Park Boulevard (42,000 cars per day) and University Drive (50,000 cars per day), just off U.S. 72. RCP acquired the property, in an off-market transaction, from CBL & Associates Properties, Inc., one of the largest mall REITs in the United States.

Madison Square is Alabama’s second largest shopping mall with 80 specialty retail stores including Aéropostale, American Eagle Outfitters, Justice, The Children’s Place, The Shoe Dept. Encore, Victoria’s Secret and Wet Seal. Built in 1984, Madison Square is currently the largest (815,729 SF) enclosed shopping mall in Huntsville, Alabama. It is currently anchored by Sears, JC Penney, and Dillard’s Clearance Center. The Property is located 0.6 miles from Cummings Research Park, the nation’s second oldest and second largest research park behind Research Triangle Park, NC. With the University of Alabama in Huntsville (UAH) as its anchor tenant, Cummings Research Park is home to 285 companies with a combined workforce of 25,000 employees. Providence, a mixed-use development by Slyman Development, is located approximately 1.5 miles west of Madison Square. The 300-acre site includes a new state-of-the-art K-8 public school and 1,800 homes selling from $300,000 to $2 million.

The non-recourse financing structure included an initial term of one year with an extension, and was sized to 78% of the total project capitalization. Thorofare’s short-term loan allows the borrower to immediately seek and execute on construction financing, with maximum flexibility through zero pre-payment penalties. The business plan for the sponsor is to re-develop Madison Square into a lifestyle, mixed-use project that will consist of retail, residential, and hotel uses. The rent from the existing tenants, who will be in transition during the re-development period, provides strong cash-flow to support an interim pre-development phase. The sponsor shall utilize this income stream to hyper amortize the bridge loan basis and a full cash-flow sweep mechanism will enable an accelerated principal pay-down. The City of Huntsville will enter into a Developer Agreement whereby the City shall provide funding for infrastructure, private roads, and a retail sales tax sharing agreement to aid in the re-development of the property.