ARLINGTON, VA-Penzance has secured a $94-million non-recourse construction finance loan from SunTrust for its 280,000-square foot office project that it is building at 3001-3003 Washington Blvd., in the Clarendon submarket. Jones Lang LaSalle’s Wes Boatwright, Jon Goldstein and Mike Yavinsky helped secure the loan for the project.
The amount--$94 million--is eyebrow raising, especially in the current environment. Most construction finance lenders like to keep loans at $50 million, Boatwright tells GlobeSt.com. “Needless to say, that limit makes it challenging for developers to do a deal of any size,” he notes, “especially in a market like DC. They wind up getting financing from more than one source.”
This particular project, of course, is a strong one, with a 58% prelease, this to CNA. It also has a strong equity partner in Invesco.
Still, SunTrust is to be lauded for the financing it is providing, Boatwright says. Besides the unusually large size of the loan, the lender offered a streamlined approval process and terms with which the borrower felt comfortable. “SunTrust was willing to underwrite the loan but reserved the right to sell part of it,” he says. “Other lenders said they would commit to the loan, but if they were unable to sell part of it, they would change the terms. The borrower found that to be unacceptable.”
The project is scheduled to deliver in 2014. It will consist of two office buildings, one of which is a 10-story, 200,000-square-foot asset; the other an attached eight-story, 80,000--foot building. CNA will occupy the majority of the 10-story building.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
