WASHINGTON, DC-Affiliates of the Wilkes Co. andQuadrangle Development Corp. have secured afixed-rate, long-term construction-to-perm loan for amultifamily project they will develop in the Mt.Triangle neighborhood. Cassidy Turley’sChristian Miles and Phil Muddbrokered the loan, provided by a life company, but declined toprovide the amount or rate other than to say the interest rate islow and that the loan-to-cost is 65%, which pencils in at a littleover $200,000 per unit.
Despite the lack of detail, the structure is clearly of interestto the commercial real estate developmentcommunity, providing as it does a great hedge against interest-raterisk for certain projects. The loan provides a constructionlease-up term of three years, plus a 10-year permanent term, Milestells GlobeSt.com.
“The beauty of the transaction is that the rate is fixed,” hesays, obviously eliminating the interest-rate risk for the borrowe.More typically, a borrower would have to secure a floating-rateconstruction loan and then would be able to lock in long-termfinancing when the property is close to lease-up.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
