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HFF Carves Out $173M Loan for Three MD Projects

While the financing markets remain tight, particularly for new construction, there continue to be willing sources of debt for apartment developments.

By Sule Aygoren Carranza | Updated on September 08, 2008

WASHINGTON, DC-In this arduous financing climate, it’s difficult to obtain debt for properties, particularly construction projects. But Archstone managed to get three of its Maryland-area developments funded, thanks to a $172.5-million loan from TIAA-CREF.Totaling 1,134 units, the properties include the 451-unit Westchester at Contee Crossing in Laurel, MD; Westchester Rockville Station, a 192-unit community in Rockville, MD; and 491-unit Westchester at the Pavilion in Waldorf, MD. The construction/mini-perm note runs for five years.

At the time the deal went to market, the communities were in various stages of construction, says Cary Abod, the locally based Holiday Fenoglio Fowler LLC director who helped broker the deal for the borrower–with executive managing director Jody Thornton and associate director John Ahmed, based in Dallas. After it got acquired by Tishman Speyer and Lehman Brothers, Archstone obtained additional financing. When it was a REIT, the development capital came from its internally funded credit facilities, explains Abod. “When it was taken private, the capitalization structure changed.”

The communities were originally part of a five-property portfolio the HFF team took out to market to obtain a straight construction loan, according to Abod. “We wanted to have a single lending source for the five properties, but the market didn’t let us do that,” he says. “We ended up splitting the portfolio up, and TIAA had a construction-to-perm program where we could do it all in house. It was sort of a one-stop-shop.”

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