Marvin Hill, VP, and Greg Ciambruschini, assistant VP in the Washington, DC office of San Mateo, CA-based Capmark Finance Inc., arranged the funding, which represents a 100% loan-to-cost ratio. The lender is Seattle-based Artesia Commercial Mortgage, the US subsidiary of Dexia Bank Belgium. Bob Riley of Artesia worked with Capmark on the transaction.
The buildings are 100% preleased to the GSA. The developer, South Florida Federal Partners LLC, is a joint venture between an unidentified DC firm, which Ciambruschini says has worked with the GSA on other primarily single-tenant properties, and a local developer.
The funding is a floating-rate loan with a 16-month term on an interest-only basis. Artesia also provided a 16-month forward commitment for permanent take-out financing. Without disclosing the rate of the construction loan, Ciambruschini says, "it's very competitive."
The funding includes the cost of the land. "It's unusual to provide 100% of the budget," he acknowledges, "but it was underwritten on the value on the back end. We and Artesia were very comfortable with it. These are big-box, high-ceiling office-processing centers, located on commercial arteries." Among the GSA requirements is the capability for a 15%-expansion of space at each location, and all have on-site parking.
"The GSA leases are 15-year term with 10 years firm," Ciambruschini continues. "The likelihood of the agency's leaving in 10 years is very low, but even if it did, these are well-suited to retail warehouse use." CIS is a new initiative under the Department of Homeland Security, and these four buildings are the first of 34, which will be built throughout the US over the next three years.
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