WASHINGTON, DC-HSBC Realty Credit Corp. has provided a $54.7 million loan for 100 M St., SE, a building was part of the Opus East bankruptcy. The three-year loan has two, one-year extension options and a sub 3% interest rate.
Northwood Investors is the building's owner, having purchased the note in 2010, when the building was only 45% leased. Now it is 70% leased – a point that helped persuade the lender, CBRE's Matt Williams tells GlobeSt.com. "They did a great job with the leasing and had gotten to the point where they wanted to refinance." CBRE Capital Markets arranged the financing for the 243,221-square foot building.
CBRE went to market targeting a number of lenders, including banks, Williams said. "We ultimately ended up with a flexible aggressive quote from HSBC."
One of the challenges with the transaction was getting lenders comfortable with the relatively high vacancy rate, compared to the broader market. Once that challenge was met, though, Williams says banks were particular eager to have the refinancing in their portfolios.
"The quality of the building, its institutional sponsorship—all of that prompted a lot of lenders to step up and be competitive."
A similar trend occurred last year, he said. "Around this time of year the life companies have run up against their allocations. Banks take advantage of that as they try to continue to build relationships."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
