BOSTON-One of the only office towers built in the city this decade has taken a big financial step forward, with ING Real Estate syndicating half of the $185-million first mortgage term loan on 33 Arch St. The 33-story, 603,000-sf building was developed by Congress Group Ventures of Boston and is backed by a partnership of Apollo Advisors and Canadian-based SITQ.

Loan proceeds were used to refinance the original construction loan and fund the remaining lease-up costs for the property. ING, as administrative agent and sole arranger, underwrote and closed the $185 million in late 2004, according to David Mazujian, managing director and president of ING’s US finance platform. “We made a conscious effort to allow the property to further lease up prior to syndication,” says Mazujian.

The level of commitments from tenants since then “is a testament to the strengthening Boston market,” adds Mazujian. Several other European institutions are involved in the syndicate. Apollo Real Estate Advisors is a leading international real estate investor and fund manager that has collectively invested in more than 400 transactions with an aggregate value exceeding $30 billion. A subsidiary of the Caisse de depot et placement du Quebec, SITQ is a real estate development, investment and management firm that owns 114 assets valued at $9.4 billion.

Originally conceived in the 1980s before being stalled by two market crashes, 33 Arch St. was taken over by Congress Group just as the technology boom was ratcheting up for its brief surge in 2000 and 2001. By the time the tower was ready to move ahead, the regional recession was taking hold, leading many to opine that the building should again be shelved.

Congress Group founder Dean Stratouly determined otherwise and forged ahead with what was essentially a speculative tower. Financial District rents projected in boom times to approach $100 per sf backslid instead to an average less than half that rate, adding to the drama as the tower rose in the heart of the downtown district.

Utilizing the Boston leasing team from CBRE/New England, however, 33 Arch St. was ultimately able to land an anchor tenant in Digitas Inc., a Back Bay marketing company that committed to 200,000 sf for 12 years, followed immediately by a 65,000-sf deal with the Securities and Exchange Commission. Despite the initial hand-wringing from industry observers, the building has now reached 84% occupancy, notes Mazujian. “We believed in the success of this building from the start,” he says.

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