WASHINGTON, DC–A local developer recently acquired a vacant office building at 1724 Kalorama Rd., NW for about $9 million. For another $10 million he plans to convert the property into a 48-unit multifamily property with four parking spaces. He recently secured, via Greysteel, a financial package of $14.9 million in senior debt and preferred equity to help cover the acquisition and construction costs. This is the story about that financing, or rather, the story of why the financing was a bit more complicated than it had to be.
The financing consists of a senior construction loan and preferred equity, which were provided by different investors. The two-year construction loan is nonrecourse with a fixed interest rate. The preferred equity was provided by a crowdfunding site, which Greysteel Senior Director Brendan Scanlon declined to name. Scanlon negotiated the financing on behalf of the developer.
Greysteel and the developer made the decision to use a private lender instead of a commercial bank for three reasons, Scanlon told GlobeSt.com.
Continue Reading for Free
Register and gain access to:
- 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
© 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.