HFF Arranges $90M Loan for New Archstone M-F Project in Boston

Development of Archstone Avenir, a 241-unit luxury apartment community in Downtown Boston, is moving forward with help from a $90 million construction loan arranged by the Boston and Dallas offices of Holliday Fenoglio Fowler L.P. The 36-month construction loan was secured through NEBF Investments (National Electrical Benefit Fund), a Washington, D.C.-based union pension fund advisor and real estate investment program. John Ahmed, an HFF associate director from the Dallas office who helped arrange the financing, said HFF has worked with NEBF in the past. The fund, created by the International Brotherhood of Electrical Workers and National Electrical Contractors Association, has nearly $12 billion in net assets, making it the third largest Taft-Hartley pension fund in the United States. The fund’s strategy focuses primarily on new development of virtually all commercial property that “results in creation of superior investment returns and union man-hours,” according to the fund’s website. Referring to the tough credit environment, Ahmed said, “It’s a real testament to the quality and strength of Archstone and the product they have developed. They have the strongest presence in the strongest markets. Unfortunately, the same project, if developed by a less experienced group, might not have gotten done.” Archstone Avenir (pictured), scheduled for completion in spring 2009, will also have 28,000 square feet of street-level retail space and a 115-space structured parking garage. It is located at the corner of Canal and Causeway streets, adjacent to the Rose Kennedy Greenway in the Bullfinch Triangle area in Downtown Boston. The property is above a newly constructed MBTA subway superstation that has access to the Orange and Green lines and across Causeway Street from the North Station commuter rails station. “The property enjoys what is arguably the best multi-family location in Downtown Boston,” said Anthony Cutone, an HFF director in the Boston office. Cutone, Ahmed and HFF executive managing director Jody Thornton of the Dallas office, worked together on the financing deal. As reported by CPN on July 17, 2007, Cutone helped HFF arrange a $149 million equity investment and co-development agreement for Avenir. He worked on behalf of Trinity Financial, a Boston-based real estate development firm specializing in residential and commercial developments. Ahmed said the location in a vibrant 24-hour gateway market like Boston was one of the three main reasons the $90 million construction loan was approved in this environment. He also cited the strength and experience of the developer and the strong real estate fundamentals of the deal. Calling those three elements “a trifecta,” Ahmed said, “If you don’t have one of those legs of the stool in this environment, the deal doesn’t get done.” Archstone, based in Englewood, Colo., was taken private in October 2007, when it merged with and into a partnership jointly controlled by Tishman Speyer and Lehman Brothers. The company’s apartment portfolio is concentrated in the Washington, D.C., region; Los Angeles: San Francisco Bay area; San Diego; Seattle; New York City and the Boston metropolitan area. It has several properties in the Boston region including the 420-unit, luxury Archstone Boston Common, which opened last year at 660 Washington St. in Boston, where rents range from $2,625 for a one-bedroom to over $6,500 for three-bedroom apartments. As of Dec. 31, 2007, Archstone owned or had ownership positions in 416 communities with over 86,000 units, including those under construction. HFF, with 18 offices across the United States, is a leading provider of commercial real estate and capital markets services, including debt placement, investment sales, structured finance, private equity, note sales, note sale advisory services and commercial loan servicing.