$500M Package Seals Fate of Transportation Dept. HQ

WASHINGTON, DC-Nothing will get in the way of the development of new US Department of Transportation headquarters complex now that construction financing to the tune of $490 million has been put in place. LJ Melody & Co., the banking division of real estate services firm CB Richard Ellis, orchestrated the financing on behalf of project developer JBG Cos. The funds, which come in the form of a bond issuance at an unspecified “low interest rate,” are from Credit Lyonnais Securities (USA) Inc. “The structuring with Credit Lyonnais provided a smooth execution of a highly structured asset backed transaction allowing us to address issues related to proceeds, negative arbitrage, bond insurance and other cost reductions or eliminations while minimizing overall interest costs and maximizing proceeds,” LJ Melody’s Paul C. Dougherty says. Upon completion of the work, the General Services Administration will lease the space from JBG Cos. under a 15-year agreement with the option for a 10-year renewal.Currently headquartered in the Nassif building at 400 7th St., SW, the Transportation Department’s new 1.4-million-sf home will occupy an 11-acre parcel within the Southeast Federal Center, or Navy Yard Annex, on M Street, also in the southwest area of the District. The Michael Graves & Associates-designed facility will consist of two structures at nine and eight stories each, with an underground parking garage capable of accommodating up to 950 vehicles. The Transportation Department’s approximately 5,500 employees–currently scattered about among the 7th Street location and other sites–are scheduled to move into the new headquarters in 2006.