WASHINGTON, DC-Republic Properties Corp. has secured $172 million in bridge financing for an office building in the Capitol Hill submarket. The Cassidy Turley Washington, DC office's  David Webb, John Campanella, and Jamie Butler helped the company secure the package--an unusually large amount for bridge financing, even in the DC area market.

The financing was comprised of a senior loan originated by a commercial bank and a mezzanine loan provided by a private equity fund. The 385,765-square-foot building, also known as Republic Square I, is located on 25 Massachusetts Ave., and is 60% leased to such tenants as the American Medical Association, American College of Physicians, National Cable and Telecommunications Association, General Motors, and the Department of Justice.  The bridge financing proceeds are being used to refinance the previous loan as well as fund future leasing costs. It was not an easy deal to structure because of its size and also because the property is only 60% leased, Webb tells GlobeSt.com. "The debt markets are still not that aggressive on properties with that much vacancy. But this was a great property and a great borrower."Bridge financing never really left the DC area market, but there are signs that it is becoming more plentiful now, Butler says, starting with Republic’s $172 million transaction. Terms, though, are not necessarily improving--at least compared to other capital market products, as it is a risky form of financing for both buyer and lender. For the buyer it can mean expensive terms; for the lender it usually means going in at much lower coverage levels.