BOSTON-The developers who remade a shuttered landmark into a mix of residential condominiums and retail space have received permanent financing of $4.4 million for the building in the city's South End. The five-year fixed-rate note was financed by Salem Five Savings Bank and includes a five-year extension option.

"Salem Five performed exceptionally well on this assignment," says Meredith & Grew president Kevin Phelan, whose firm's Capital Markets Group arranged the loan on behalf of Stonegate Group LLC. The bank closed the loan on the original terms despite the dramatic fall in US Treasury rates that occurred over the summer, relays Phelan, adding that, "given volatility in the marketplace, we were impressed by the bank's willingness to honor their proposal."

Overhaul of the building helped restore a property that some had feared would require demolition after being closed and neglected for years. The asset at 1361-1375 Washington St. has a prominent location in one of the city's most populous neighborhoods, an area being transformed after decades of disinvestment. Washington Street is a major artery that has also been upgraded by the city in recent years, including the addition of a new transit line that feeds into Downtown Boston, a line running past the Penny Savings Bank property.

Besides preserving the existing two-story structure, Stonegate principals Sean McGrath and Dean Calivas grafted a three-story addition to the top of the building, providing for 23 residential condominiums. There is also 9,000-sf of ground-floor retail and underground parking for 29 vehicles. "This was a great outcome," says M&G VP Seth Rosen, who arranged the loan with Phelan. The developers, says Rosen, "did an exceptional job of repositioning this historic asset and we were pleased to obtain a permanent loan that facilitated their business plan."