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CMA
November 16, 2018  

Developer Seeks Loan on New DC Complex

The owner of a big mixed-use development in Washington is looking to line up an $800 million mortgage on the completed first phase.

The 2.2 million-square-foot complex, called The Wharf, lies on 24 acres of city-owned land along Maine Avenue in the South Waterfront section of Southwest Washington. The developer is a joint venture among PSP Investments, Madison Marquette and PN Hoffman. The trio is shopping for a five-year loan via broker Eastdil Secured.

The existing portion of the property opened in stages last year and early this year. It encompasses two office buildings, 861 residential units split among two apartment buildings and two condominium properties, three hotels and an entertainment venue known as The Anthem. The individually owned condos wouldn’t be part of the loan collateral.

Construction of the first phase began in 2014, financed in part by a $400 million debt package that was led by Wells Fargo. A number of other banks, including Bank of America, BB&T, M&T Bank, SunTrust and locally based United Bank, ultimately participated. A chunk of the proceeds from the new loan would be used to retire that debt. In addition to the bank financing, the District of Columbia issued $145 million of bonds backed by cashflows generated by the property.

Washington-based Madison Marquette, local developer PN Hoffman and PSP, an Ottawa pension manager, also have been talking to lenders about lining up some $760 million of debt to be used toward construction of the complex’s second phase. That component is slated to have 1.1 million sf of additional space: offices, residential units, retail space and at least one hotel. The status of that financing is unknown.

The Wharf is part of a planned transformation of the area along the Washington Channel, across from East Potomac Park, into a “live-work-play” neighborhood and a destination for dining and entertainment.