San Francisco-based Newmark Realty Capital Inc. has arranged $8.5 million in permanent financing for all but the Target-store portion of Regal Plaza, the recently constructed retail center at the southeast corner of Regal Street and the Palouse Highway, says Demetri Koston, Newmark’s Spokane-based vice president.

The newly financed portion of the plaza includes 4 acres of land with four fully occupied structures owned by a holding company led by Spokane real estate developer David Black.

The structures have a total of 35,000 square feet of commercial space, and tenants include PetSmart, Anthony’s Beach Café, and Numerica Credit Union.

Koston says it’s common for developers and owners of investment property such as Regal Plaza to replace short-term construction financing with permanent financing when the development is complete.

Lenders competed aggressively to handle the permanent financing, says Koston, who is based in Newmark’s office in the Fidelity Building, at 522 W. Riverside, downtown. 

“They really covet that Target-shadow retail, because it generally performs well,” he says.

Developments around Target stores tend to attract other strong tenants and to drive the market on lease rates, Koston says.

The fact that the development also is on the South Hill makes it even more attractive, he says.

“I do believe it’s one of the most highly sought-after submarkets in the Inland Northwest,” Koston says.

Minneapolis-based Target Corp. separately owns the 10-acre portion of Regal Plaza occupied by a 135,000-square-foot Target store, which isn’t part of the financing.

Newmark is one of the largest independently held commercial mortgage banking corporations in the West.

The Regal Plaza financing is the third multimillion-dollar commercial real estate loan Newmark has arranged in the Spokane area since April.