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BOSTON-Northland Investment Corp. has completed refinancing on two properties in the Boston Harbor waterfront district for loans totaling $40 million. The company received $19.2 million for 400 Atlantic Ave., and a $16.8-million refinancing loan for 250-260 Summer St. (the Channel Building) from Citigroup. Northland owns both properties in a joint venture with the New York City-based Simpson Asset Management Co. LLC.

Consoli says that Northland is pursuing other refi deals as well. 600 Washington St. in Boston, a seven-story, class B office property across from the 1.8-million-sf Millenium Place development, is being refinanced. “We expect it to close by the end of the year.”

With the office rental vacancy rate still at record highs, refinancing can be difficult in this market, according to executive vice president Kevin C. Phelan of Meredith & Grew’s Finance & Capital Markets Group, who secured the loans along with vice president John J. Broderick. “Single tenant buildings are very tough to get refinanced in this market, or in any market for that matter,” Phelan tells GlobeSt.com.

“Citigroup stepped up and provided a structure that allowed [Northland] the flexibility it needed while delivering the transaction at a very competitive rate,” adds Broderick. The refinancing on 400 Atlantic Ave. is an 80% LTV, 10-year loan and the Channel Building has an eight-year loan, both with a 30-year amortization.

Their success in securing the loans was in part tied to the lease agreements that Northland has in place with its tenants. The law firm of Goulston and Storrs recently signed a 10-year lease extension for 100% occupancy of the six-story, 104,690-sf 400 Atlantic Ave. building. Morrison, Mahoney and Miller LLP, which occupies approximately 70% of the eight-story, 104,710-sf Channel Building, has eight years remaining on its lease. KLD Research and Glickman Turley LLP are the building’s other tenants, leaving approximately 10,000 sf unoccupied.

Further complicating the securing of the loans was that both buildings have tenants which are privately held law firms. “It’s matter of getting lenders comfortable, with nonpublic companies when they occupy the entire asset,” Mark Consoli, COO of Northland tells Globest.com. “In this case, we have two nationally recognized law firms as tenants.”

Another positive for the deals is the revitalization of the waterfront. The cleanup of the Boston Harbor, and projects such as Intercontinental Hotels’ 500 Atlantic Ave. condo/hotel, Beacon Capital’s $250-million mixed-use Channel Center on Fort Point Channel, as well as the Rose Kennedy Greenway, increase the value of Northland’s assets.

“The completion of the convention center, as well as all the other improvements, vastly changes the whole dynamic in that area,” adds Consoli. “It vastly improves the whole experience of walking down Summer St.”

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