GSA Finalizes $527M in Loans for Four Projects

ST. LOUIS-The Molasky group of Cos. has closed on the final section of debt for $527 million in loans for four new buildings leased by the General Services Administration in the Midwest and Portland, OR. The lending for developer Molasky, arranged by Newmark Realty Capital, includes $271 million in construction and $256 million in permanent financing.

It took Newmark one year to put together the total lending package, including challenges such as a ground lease, the option on a facility bond and tight timeframes upon awarding the contracts. The properties consist of the new National Archive and Records Administration Headquarters in St. Louis, and three regional FBI facilities in Cincinnati, Minneapolis and Portland, OR; all totaling about 880,523 square feet.

George Mitsanis, a principal with Newmark, tells GlobeSt.com that the loan for the Portland property closed in late October. “Groundbreaking has occurred on all the properties except for Portland, which should take place soon,” he says. Each of the FBI facilities are about 100,000 square feet, and should all be complete by Jun 2012.

In St. Louis, construction started in late 2009. The records administration will lease the building for 20 years when it opens in May, where it will store most US military records.

Lending is almost completely shut off for office properties, but of course this portfolio has a trustworthy tenant in the government, Mitsanis says. “Well, in the West, there are some multifamily projects breaking ground, but office leasing nationwide you have to have significant pre-leasing to a strong corporate tenant. We’re still in a market where lenders would really hesitate on speculative office buildings. However, we at Newmark are very busy with life companies, doing a lot of financing and refinancing,” he says.