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SOMERVILLE, MA-A recently built commercial property in this inner suburb of Boston has received $10 million in financing through Genworth Life Insurance Co. The loan was secured on behalf of Krisco Development for the firm’s One Davis Sq., a three-story, 49,000-sf office/retail building located near Tufts University.

Arranged via the Boston office of Goedecke & Co. LLC, the loan was “a unique transaction,” according to Goedecke principal Shawn Herlihy. “Not only did the borrower need a 25-year term, but also a 24-month forward commitment,” explains Herlihy, who secured the financing with Goedecke principal Christine Morrell.

One Davis Sq. recently came on line at the gateway to Somerville’s primary business district. The first floor retail is occupied by a CVS Drugstore, while there is a Boston Sports Club on the second floor and 12,000 sf of office on the top level. The Davis Square MBTA Red Line subway is directly across from the property. “It’s a fantastic building,” Herlihy tells GlobeSt.com, explaining that Krisco founder Kristopher Ogonowsky demolished an older structure on the site to make way for One Davis Sq. The CVS opened earlier this year, followed by the Boston Sports Clubs facility in February. Richards Barry Joyce & Partners is marketing the office portion.

Despite upheaval in the capital markets, One Davis Sq. attracted substantial interest among lenders, says Herlihy, citing the 25-year lease to CVS and a 15-year deal with the sports club operator for providing the stability preferred in the current environment. Rising office rents are another plus, he says, with rates substantially above where they were when planning for the building commenced. “Genworth was able to structure the perfect deal for the borrower,” says Herlihy, adding that the insurer’s ability to execute the loan provided additional comfort in their selection.

Herlihy is among those industry professionals anticipating a slow recovery for commercial mortgage backed securities lenders, but he maintains Geodecke’s & Co.’s relationships with the insurance community should enable deals to be placed in 2008. Only about 25% of Goedecke’s business traditionally has employed CMBS lending sources, says Herlihy, whose firm last year arranged $700 million in financing for some of the region’s top developers and investors. The company also has offices in Providence, RI, and Westport, CT.

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