ROSSLYN, VA-After months of deliberating and testing the market fundamentals, Monday Properties has decided to move forward with its trophy office development here. It plans to break ground on 1812 N. Moore St., a $300-million, 35-story tower that will be designed to Platinum LEED standards, in mid-October. The building is expected to deliver in fall 2013.
The timing is understandable despite the current economic malaise: Rosslyn has the fortunate distinction of being one of the few submarkets in the US where office rents are actually rising and there is a healthy demand for office space, even premium product.
The company doesn’t have any pre-leases signed yet, but is highly confident it will in short order, Anthony Westreich, president and CEO of Monday Properties, tells GlobeSt.com. “We are talking with five prospects right now--if they all sign on, we will have the building fully leased.” Monday has retained Susan Carras and Steven A. Kohn at Cushman & Wakefield Sonnenblick-Goldman LLC to secure construction financing for the project.
Westreich says that other news accounts of the groundbreaking inaccurately portrayed Monday has having sought out construction financing already, and coming up empty handed. Carras and Kohn will begin seeking financing this week.
Meanwhile, Monday is kicking in $30 million of its own money to get the project moving. The construction finance market has, clearly, been very quiet if not outright dead during the depth of the recession. Kohn tells GlobeSt.com that it is beginning to recover, with liquidity returning “by the week.” This asset, in particular, is likely to attract lenders given its sponsorship, the strong submarket and the direction of rental rates.
All that said, the construction financing is still tenuous, with loan-to-cost ranging anywhere from 50% to 70%, Kohn says, and pricing anywhere from 250 to 300 basis points over Libor. Lenders aren’t holding as much debt on their balance sheets, Kohn says, which means it is more likely that a syndication group will be used.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
