WASHINGTON, DC-Penzance and Greenstreet Real Estate Partners have secured a $61 million loan to refinance the joint venture’s first mortgage on 1130 Connecticut Ave., NW--a 218,571-square-foot office building acquired in 2004. The loan, which is replacing CMBS financing, is being provided by United Overseas Bank Limited of Singapore--its first transaction in the DC area, Jones Lang LaSalle managing director Wes Boatwright tells GlobeSt.com. Boatwright, along with colleagues Jon Goldstein and Jim Gladden brokered the transaction.

The bank offered a seven-year, non-recourse, floating rate loan with flexible pre-payment options, Boatwright says. The generous terms were the reason why the owners went with the bank, he adds. “There is a 15% vacancy in the building, but the lender did not require a hold back for the leasing of that space, something a lot of banks do. Also, most banks want to do five years, not seven.”
Since its acquisition, the owners have done a good job bringing up the building’s occupancy rate, repositioning it and commanding higher rates, Boatwright says.

The refi was able to pencil in nicely for a couple of reasons. First, the loan was first underwritten before the wildly exuberant CMBS underwritten overtook the market. Also, though, the building has risen in value since its acquisition, Boatwright says. In general, capital is having a difficult time finding transactions that work. Still, Boatwright says that deals like 1130 Connecticut are more the exception than the rule.

What also helped facilitate this transaction were JLL’s strong international bona fides. The company has guided several foreign banks in their first loans in the area, including Bank of China, Anglo Irish and now United Overseas Bank.