Cassidy Turley Secures $181M Permanent Financing for Trophy Office Building in DC
- Nov 08, 2012
By Gail Kalinoski, Contributing Editor
Cassidy Turley secured a $181 million permanent financing loan for Washington, D.C.’s newest trophy office development, 1000 Connecticut Ave., a 12-story, 382,988-square-foot building located in the city’s CBD overlooking the White House.
The 20-year, fixed-rate loan was provided by MassMutual life insurance company for the building at the northwest corner of Connecticut Avenue and K Street. Considered a premier downtown location because of its views and access to transportation, including the Metro, the building is anchored by the law firm of Arent Fox LLP. The law firm announced in May 2008 that it was moving from its nearby offices at 1050 Connecticut Ave. and taking eight floors, about 255,000 square feet, in the new building when it was completed in 2012 to handle its company’s expansion. The 17-year lease calls for Arent Fox to have prominent signage on the exterior and a first-floor reception area. The building is now about 86 percent leased.
It was designed by renowned architectural firm Pei Cobb Freed, which also designed its sister property across K Street at 1700 K St., and has achieved LEED Platinum certified status. Amenities include a rooftop deck and a fitness center.
Philip Mudd, Christian Miles, both senior managing directors at Cassidy Turley, and Bradley Geiger, an associate vice president, secured the financing on behalf of the owner, Connecticut & K Associates L.L.C. The loan was closed by Grossberg, Yochelson, Fox & Bedya, the owner’s counsel.
The development group is comprised of several longtime Washington, D.C., families that have owned the site for more than 60 years, including the buildings that were demolished to construct 1000 Connecticut Ave.
Describing them as long-term players, Mudd said,” They did not build it to sell it.”
Mudd added it was unusual to get a 20-year loan as well as one that extended past the terms of the lease of the major tenant.
“There’s more 10-year money than 20-year money (available),” he told Commercial Property Executive.
Mudd attributed the long-term financing deal to “the location, the product, the sponsorship and the tenancy.”
Mudd’s group secured the original $194 million construction loan for the property back in 2008, closing in November 2008 at the height of the collapse of the housing and financial markets. A consortium of lenders headed by Chevy Chase Bank provided the 2008 loan.
“Positioning the property for the best possible long-term financing was a process that began not long after we closed the construction loan in 2008,” Miles said. “And upon substantial completion of the construction, we worked closely with the owners to lock in a 20-year rate that would protect their investment over many real estate cycles in the future.”
The 1000 Connecticut Ave. deal comes about two months after Cassidy Turley arranged a $243 million refinancing package for another Washington, D.C., trophy property. In September, the commercial real estate services firm announced it had secured a package on behalf of the borrower, Republic Properties Corp., for its Portals III project. It is a 10-story, 509,700-square-foot office tower located within a 2 million-square-foot mixed-use development at 1201 Maryland Ave. SW in the city’s Southwest submarket. The Cassidy Turley team arranged for the multi-tiered financing that featured five banks providing a senior-debt structure, mezzanine equity from a preferred equity fund and a preferred equity position from a national pension fund advisor.