The deal will make Capital One the largest locally-based retailbank in the DC area. For the commercial real estate community, theimpact of the acquisition is less clear. Chevy Chase has been afairly regular contributor of capital to commercial real estatetransactions here.


More recently, like many local community banks, it has filledthe void in CRE financing. For instance, earlier this month it leda five-bank consortium to provide a $194-million, 54-monthterm financing to Connecticut & K Assoc. for 1000Connecticut Ave.--a 12-story, 383,392-square-foot trophy officebuilding under development in the city's CBD. It was also one ofthe banks that supported a $75-million loanto the Mortgage Bankers Assoc. for the acquisition of 1331 L St., a170,000-square-foot building.


A transaction has been rumored for weeks--at one timeCitibank wassaid to be a serious suitor. Still, though, it has been difficultfor the local CRE community to assess exactly what will be theimpact of this local consolidation of banking resources. "I wouldlike to see more details about the transaction before I make ajudgment," one broker--who has worked on deals with the "Obviously, any pullback [in CRE finance] would not bewelcome in this current environment."


Once customary regulatory approval is received, the transactionis expected to close in Q1 2009. Capital One expects to achieve areduction of $125 million in non-interest expenses and to incur$225 million of merger and integration costs as a result of thedeal. The combined company will have deposits of more than $110billion--the 8th largest in the US--a managed loan portfolio ofmore than $159 billion and 983 branches.

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