Federal Capital Partners Enters Boston Multifamily Market

BOSTON—Federal Capital Partners of Chevy Chase, MD has officially entered the Greater Boston real estate market with the financing of a 33-unit luxury condominium development in South Boston.

Federal Capital and partner the Grossman Companies of Boston provided $14.5 million in construction financing to KEMS Development Co. The Danvers, MA-based development firm is currently building the condominium project at 170 West Broadway, the site of the former Liberty Bell Roast Beef restaurant in the St. Vincent neighborhood district in South Boston.

170 West Broadway will consist of one and two-bedroom luxury condominiums, including eight penthouses with rooftop decks, below-grade garage parking and 5,000 square feet of ground floor retail space. Construction began in August 2015. Project delivery is expected in the fourth quarter of 2016.

E.J. Corwin, senior vice president and head of the structured investment group for Federal Capital, tells Globest.com that the firm decided it wanted to invest in the City of Boston about a year-and-a-half ago and after performing significant due diligence determined that the 170 West Broadway project with Grossman would be its first deal.

As part of its overall expansion into new markets in the Northeast, Corwin says that the company identified Boston as a very strong real estate market with good demographics and economic drivers—a stable investment market with a good amount of liquidity. The company was also looking for a well-established local partner and Corwin says Federal Capital eventually partnered with Grossman on the 170 West Broadway property and is currently reviewing other possible transactions with Grossman in Greater Boston.

"We're very interested in income-producing assets as well as expanding our structured investment portfolio," Corwin says. He adds, "We are looking to expand (our partnership with Grossman)."

David Grossman, co-president of the Grossman Companies, states, "This is a fantastic project in a thriving, urban location. We are excited that we were able to provide—in a short time frame—an attractive financing solution to KEMS. As one of the most active private lenders in New England, we are equally enthused by our new partnership with FCP and look forward to closing future transactions in partnership with the FCP team."

Corwin says that Grossman Development is reviewing possible opportunities with Federal Capital as well as looking for investment projects on its own. He says that no further transactions are expected in the "immediate term." Federal Capital is looking to invest in existing multifamily properties in Greater Boston.

When asked to characterize its activities in Boston, Corwin says, "I would say we are active investors right now and we are going to be patient, we are going to pick our spots and we are going to continue to look for strong, experienced local experienced partners, like the Grossman Companies."

Federal Capital Partners announced on Monday that the firm and partner Strategic Capital Partners acquired an office building development site at the I40 and I540 intersection in the RTP/I40 submarket of Raleigh, NC. No financial details of the transaction were released.

FCP and SCP have selected Brasfield & Gorrie as their general contractor. Construction is to begin immediately on the 198,481-square-foot, five-story office building —Forty540—that will be completed in the first quarter of 2017.