Dairy Block Ownership Lands $165M in Financing for Mixed-Use Project in Denver

DENVER—The ownership of the micro district Dairy Block in Downtown Denver has secured $165 million in permanent financing for the 265,000-square-foot mixed-use project.

The refinancing deal was announced by Holliday Fenoglio Fowler, L.P., which arranged the long-term financing on behalf of the joint venture partnership between McWhinney, Grand American and Sage Hospitality with lender MetLife Investment Management. Loan proceeds were used to refinance the construction loan on the property that first opened in 2017.

The HFF debt placement team, which included senior managing director Eric Tupler and director Brock Yaffe, represented the borrower in the transaction. Mike Coen originated the loan on behalf of MetLife Investment Management.

Located in the LoDo district of Denver, the Dairy Block was formerly home to Windsor Dairy. Dairy Block now consists of three components: the six-story Dairy Block building totals 218,660 square feet of newly built space plus a 380-space subterranean parking garage; a historic Firehouse Block containing 92,803 square feet of office and retail space along Blake Street; and the 172-key Maven Hotel.

The Maven Hotel is an eight-story onsite boutique hotel operated by Sage Hospitality that features the 175-seat restaurant Kachina Cantina along with the Poka Lola Social Club.

The project encompasses an entire city block between Wazee, Blake, 18th and 19th streets in LoDo and features Denver’s first activated pedestrian alley that provides tenants of the office space and hotel guests a unique amenity base. Dairy Block is located two blocks from Denver Union Station and one block from Coors Field.

“We are quite pleased with this execution for the refinance of Dairy Block, as we were able to procure excellent financial terms and structure coupled with a 15-year loan term, which perfectly aligns with our long-term hold strategy on this dynamic, core, A+ asset,” says Joshua Kane, SVP of McWhinney.

The deal follows another major financing transaction secured for a McWhinney project. Last week, Berkadia announced it closed $170 million in financing for McWhinney’s Great Wolf Lodge in Garden Grove, CA.

Senior Managing Director Andrew Coleman and director Mauricio Rodriguez of Berkadia’s Hotels & Hospitality Group facilitated the deal on behalf of McWhinney. The deal, which closed on March 11, is the first 10-year fixed rate loan ever closed on this asset type, according to Berkadia.

“This was a complex deal given the uniqueness of this asset, the capital structure desired and our goal to go long term with a focus on rate and proceeds,” states McWhinney’s Kane.

The nine-story water park resort, the company’s largest at 105,000 square feet, is situated on 12 acres of land and is located two miles away from Disneyland and the Anaheim Convention Center. The property features 603 rooms, which can accommodate 3,000 guests, a 30,000-square-foot conference venue and 18,000 square feet of retail and dining, including seven restaurants, a bowling alley, a miniature golf course, a kid’s spa and arcade.