Debt, Equity Construction Finance Moves into Suburbs 

ALEXANDRIA, VA-Debt and equity financing for development can now be placed outside the Beltway. So says Cassidy Turley’s David Webb, who, along with colleague Jamie Butler, helped to arrange $68 million in financing on behalf of Redbrick Development Group for the Heights at Groveton, a 290-unit apartment development project located directly along Route 1 here. 

JP Morgan is providing a senior debt construction loan for 60% of the amount, or $40 million. Redbrick and Wood Partners will be acting as co-developers on the project, with CBRE Investors and an affiliate of Redbrick Partners providing the majority of equity.

“It’s a very good sign for us that development projects in the suburbs are now getting financed,” Webb tells GlobeSt.com. “The story we have heard in the past year is that the closer inside the Beltway, the more likely it was that new development would get funded.” This deal follows on the heels of news that Shooshan Co. secured a rare forward commitment for $100 million in permanent financing for the DARPA headquarters it is constructing here.

Of course, the fact that this is the DC area has much to do with this credit loosening, Webb says. Also, in the case of the Heights at Groveton, BRAC is a driver becuase Fort Belvoir is located nearby. The Heights at Groveton, which will also have 10,000 square feet of ground-floor retail, will deliver its first units in mid-2012. 

In 2010, Cassidy Turley closed eight development-finance deals for the DC area, Webb says. One was for an office building, two were condos and five were apartments for a total of 2.3 million square feet. For 2011 the pipeline is looking just as robust. Cassidy Turley has 100,000 square feet worth of deals with development costs totaling $100 million.