JP Morgan Takes Lead on DC Complex Loan
J.P. Morgan has agreed to lead a roughly $450 million mortgage on a portion of a mixed-use complex in Washington.
The seven-year loan to a Hines partnership would be backed by 714,000 square feet of office and retail space at CityCenterDC, a downtown development that also includes apartments and residential condominiums. J.P. Morgan is now in the market to sell down pieces of the debt to other lenders. The bank held a meeting on the syndication in the last week or so.
The complex is on a 10-acre site bounded by New York Avenue and Ninth, 11th and H Streets NW — land that was formerly occupied by the Washington Convention Center. Houston-based Hines acquired the development rights more than a decade ago. After a series of fits and starts in the planning and approval process — and then the credit crisis — Hines finally teamed up with an investment affiliate of Qatar Investment Authority, Qatari Diar, and began development in 2011.
The first phase, completed a couple of years ago, encompasses 1.5 million sf in six buildings. The two office buildings, two rental apartment buildings and two condominium apartment buildings all have ground-level retail space. The development also includes a plaza and a 1,555-space garage. While the majority of the work was funded with $700 million of equity from Qatari Diar, one or more banks appear to have provided project debt.
The collateral for the J.P. Morgan mortgage encompasses the office buildings, the retail space and the garage.
When the Hines partnership began shopping for debt late last year, it indicated it was leaning toward a separate mortgage of around $150 million on the rented component. It’s unknown if that loan has been locked in.
Two more phases of CityCenterDC are planned. They would include a hotel and more retail and office space. All or most of the land is owned by the city and leased to the developers under a 99-year agreement.