BALTIMORE, MD—Citizens Bank is providing a surprisingly large (for the current market) construction finance loan of $107.28 million to Questar Properties for the new 44-story, 394-unit luxury apartment tower it has been working towards developing for years.
The tower will be located at 414 Light St., the former site of the McCormick Spice warehouse.
Citizens was the lead arranger on the loan to longtime client Questar Properties.
The loan is a sizeable one especially considering the Basel III requirements that went into effect in 2015 creating a new category of acquisition, development and construction loans called High Volatility Commercial Real Estate. These come with a 150% capital requirement and while the new rule didn't have much of an affect on construction finance last year, that is beginning to change both borrowers and lenders have said recently.
Increasingly, one might expect the future of construction finance to look somewhat the Citizens Bank transaction: that is, one bank taking the lead with other banks participating in the deal possibly as syndicators or as partners.
BALTIMORE, MD—Citizens Bank is providing a surprisingly large (for the current market) construction finance loan of $107.28 million to Questar Properties for the new 44-story, 394-unit luxury apartment tower it has been working towards developing for years.
The tower will be located at 414 Light St., the former site of the McCormick Spice warehouse.
Citizens was the lead arranger on the loan to longtime client Questar Properties.
The loan is a sizeable one especially considering the Basel III requirements that went into effect in 2015 creating a new category of acquisition, development and construction loans called High Volatility Commercial Real Estate. These come with a 150% capital requirement and while the new rule didn't have much of an affect on construction finance last year, that is beginning to change both borrowers and lenders have said recently.
Increasingly, one might expect the future of construction finance to look somewhat the Citizens Bank transaction: that is, one bank taking the lead with other banks participating in the deal possibly as syndicators or as partners.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
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.
