Stimulus Strengthens Tax Exempt Bond Financing

WASHINGTON, DC-Buried somewhere in the economic stimulus bill is a provision that will make it easier for non-profits to use tax exempt financing to buy or build real estate. So says Richard A. Newman, a partner with Arent Fox LLP. Newman, along with other locally-based real estate executives here, made his comments Thursday at a brokers’luncheon sponsored by J Street Cos., DRI, Transwestern, Lincoln Property Co., CBRE and Akridge. Office condos in the DC market and their growing viability for non-profits was the topic–a subject that attracted a 100 or so strong audience.

Indeed, even with an additional boost from Washington, non-profits are finding that financing for office projects–whether they are condos or acquisitions of existing buildings–is booming right now, Newman tells GlobeSt.com, speaking after the luncheon. Since the start of the year, he has closed three tax-exempt real estate financings for non-profits with an aggregate value of more than $100 million.

“We did a deal that closed earlier this week–a $33.5 million, seven-year, fixed-rate, fully loaded loan under 4.2%. It was new construction residential for a non-profit. We closed another deal in same $30-million range–again fully loaded under 4%. This was a gut rehab of an office building in the CBD.” This building was originally acquired in October 2008 and refinanced in January, he says.