Su Closes on $27M Multifamily Construction Loan

BELLEVUE, WA-With financing in hand, construction is under way for the first phase of Ashwood Commons, a Downtown apartment and retail development by locally based Su Development. The overall project calls for two towers holding 520 apartment units, 85,000 sf of retail space and underground parking for 1,000 vehicles at the intersection of NE 10th Street and 112th Avenue NE. It will be the city’s first high-rise apartment project.The first phase of the development will include a 26-story tower with 170 apartment units, 347 underground parking stalls and approximately 18,000 sf of retail space. Completion is expected in March 2006. Timing for the larger second phase has not yet been determined. Su Principal John Su could not be reached for comment.HomeStreet Capital, one of the Northwest’s oldest multifamily and commercial real estate lenders, provided $26.8 million in construction financing for the first phase, an amount it considers to be just under 65% of the value of the completed project. Financing was arranged by Tim Patrick through HomeStreet Bank portfolio funds. Patrick tells GlobeSt.com that the three-year construction loan floats over 30-day Libor. The typical spread for such a project is between 225 and 275 basis points.Patrick says he’s confident in the success of the project because of projected job growth in the area and the fact that there is a very limited amount of housing in Downtown. A recent study by the City of Bellevue called for Downtown housing to grow from about 2,100 units four years ago to 10,600 units in 2020. Job growth in the city is expected to grow from 35,000 to 65,000 over the same period, according to the study. Additionally, he says the Puget Sound apartment market and the Bellevue submarket are forecasted to improve over the next two years, with vacancy rates declining and rental rates increasing over those of 2003-2004. Su Development purchased the site for the project in 2000 and has been working through the entitlement process since that time. The first tower will contain 23 floors of residential units, two floors of retail and one of amenities, including a media room and fitness center. The top three residential floors will house 14 penthouse units. The average monthly apartment rent in the complex is slated at $1,370. The asking rates for the first phase of retail space are $32 for the larger, two-level spaces and $28 for a second-floor space. Wallace Properties has the retail leasing assignment.