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GMU Refinances Arlington Property With Rare Terms

ARLINGTON, VA-The $68.5-million, fixed-rate non-recourse loan covered 100% of the costs.

By Erika Morphy | Updated on October 11, 2006

ARLINGTON, VA-George Mason University Foundation recently closed on a $68.5-million, fixed-rate, non-recourse permanent loan through Chicago-based LaSalle Bank for a mixed-use asset on 3434 Washington Blvd. The refinancing was unusual in that it covered 100% of costs, says Roger Edwards, managing director of Columbia National Real Estate Finance, LLC in Washington, DC. “The foundation’s primary goals were to get maximum proceeds out of the refinancing and take out the building’s floating rate construction loan,” he says.

It was a 10-year term, with a two-year IO period and 30-year amortization, divided into a senior note of $64 million and subordinated note of $4.5 million. Edwards would not give the precise interest rate but did say it was not below 6%. The LTV was 85%.

Edwards says it’s atypical for lenders to offer 100% of costs even in the strong Washington, DC area market. “Typically they want to have some equity in the transaction.” That said, he adds, if certain elements align properly, such terms can be had. “There has to be a strong sponsor such as the George Mason University Foundation, a class A location and assets and a strong tenant.”

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