June 1, 2012
CM ALERT: SunTrust Writes Loan on Va. Project
SunTrust has originated a $94 million construction loan on an office project just outside Washington.
The nonrecourse loan has a three-year term, with two one- year extension options. The coupon is 250 over one-month Libor. The borrower is a joint venture between Invesco Real Estate of Atlanta and Penzance, a Washington developer that has spent more than four years planning the $150 million project. The partnership, the first involving those two firms, was formed in March, two months after Penzance lined up a major office tenant for the 294,000-square-foot development.
Construction got under way this month and is slated for completion in early 2014. The plans call for two office buildings in the Clarendon neighborhood of Arlington, Va., with a combined 23,000 sf of ground-floor retail space.
Jones Lang LaSalle brokered the financing. The assignment attracted interest from many different types of lenders, due to the quality of the project and the strong reputations of Invesco, Penzance and the lead tenant, said Wes Boatwright, a managing director at Jones Lang.
The tenant is CNA, a not-for-profit research organization whose principal clients include the U.S. military and other federal, state and local government entities, In January, it signed a 15-year lease for about 170,000 sf of office space, or 58% of the planned complex. The 70-year-old organization plans to move its headquarters and about 600 employees from 4825 Mark Center Drive in Alexandria, Va., where its lease on 161,000 sf expires in 2015.
CNA will occupy eight floors of a 10-story building at 3001 Washington Boulevard, which will total 203,000 sf, The. second building, at 3003 Washington Boulevard, will have eight stories and 90,000 sf. The two structures will be connected by a four- level underground garage, but are designed to function independently so they could later be refinanced or sold separately.
A number of commercial properties are being demolished to make room for the project. The development, one block from the Clarendon Metro Station, will also include a public plaza and spacious sidewalks to accommodate outdoor restaurant seating.
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