WASHINGTON, DC-Affiliates of the Wilkes Co. and Quadrangle Development Corp. have secured a fixed-rate, long-term construction-to-perm loan for a multifamily project they will develop in the Mt. Triangle neighborhood. Cassidy Turley’s Christian Miles and Phil Mudd brokered the loan, provided by a life company, but declined to provide the amount or rate other than to say the interest rate is low and that the loan-to-cost is 65%, which pencils in at a little over $200,000 per unit.
Despite the lack of detail, the structure is clearly of interest to the commercial real estate development community, providing as it does a great hedge against interest-rate risk for certain projects. The loan provides a construction lease-up term of three years, plus a 10-year permanent term, Miles tells GlobeSt.com.
“The beauty of the transaction is that the rate is fixed,” he says, obviously eliminating the interest-rate risk for the borrowe. More typically, a borrower would have to secure a floating-rate construction loan and then would be able to lock in long-term financing when the property is close to lease-up.
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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.
