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W&D Structures $53M Combo Facility for Tenleytown Assets

WASHINGTON, DC—“This wasn't necessarily a middle of the fairway type of deal,” Chris Hew tells GlobeSt.com's Erika Morphy.

By Erika Morphy | erikamorphy | | Updated on April 25, 2016
4620 Wisconsin Ave., NW, is one of the buildings to be converted to an apartment. 4620 Wisconsin Ave., NW, is one of the buildings to be converted to an apartment.
WASHINGTON, DC—Walker & Dunlop has structured a $53 million facility for the locally-based developer Urban Investment Partners that provides both acquisition and construction financing for its recent purchase of three Tenleytown assets as well as construction financing for their gut and redevelopment. The acquisition was first announced in February. Briefly, UIP purchased three class C office buildings from American University for $45 million with plans to renovate two of the properties into apartments. The three properties are located at 4000 Brandywine St., NW, 4620 Wisconsin Ave., NW and 4545 42nd St., NW. UIP wanted both the acquisition and construction financing in one facility, W&D’s Chris Hew explained to GlobeSt.com. Hew, along with colleague Dan Martin, put together the financing, which was not, as Hew put it, “a middle of the fairway type of structure.” “Typically a company will just secure a straight acquisition loan but this facility also included the conversion financing so there was more heavy lifting involved,” he said. For example, during the construction period there would obviously be no cash flow from the properties and when it delivered there would be a stabilization period. And in general, “there are always unknowns attached to any sort of conversion play,” Hew said. Chevy Chase, MD-based CapitalSource, a division of Pacific Western Bank, provided two floating rate construction loans of $24.9 million and $18.6 million with four-year terms for the two office-to-multifamily conversion projects. Bethesda, MD-based MidCap Financial, managed by Apollo Capital Management, provided a max-leverage $9.7-million floating rate permanent loan for the office building.

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