Mesa West Capital has provided American Real Estate Partners (AREP) with a $26.1 million mezzanine loan to facilitate the conversion of a 200,000-square-foot office building into a 199-unit multifamily community in Old Town Alexandria, VA, a thriving historic community less than eight miles south of Washington, DC.
The five-year interest-only mezzanine loan was originated by investment funds managed by Mesa West Capital, a debt investment manager offering owners and investors a wide variety of financial solutions throughout the capital stack to help navigate today’s challenging economic environment. The loan is part of an overall debt package that provided 67.5% loan-to-cost financing with a $61.8 million first mortgage construction loan originated by Bank OZK.
Built in 1984, the seven-story 1101 King Street is located in Old Town Alexandria, a historic and highly desirable submarket of Washington, DC. The sponsor will transform the former office building, and reposition as City House Old Town, a best-in-class residential product in the heart of Old Town Alexandria. The luxury community will offer seven floorplans ranging from 572-square foot junior one-bedroom units to 1,394-square foot three bedroom, two-and-a-half bathroom units. Each apartment home will feature 9-foot ceilings and condo-quality finishes, including stainless steel appliances, quartz countertops and custom closets. The majority of the homes will feature expansive open-air terraces. Resident amenities will include a landscaped courtyard garden and roof top deck, lobby lounge, private club suite, fitness center, pet spa and concierge services.
“The transaction presented an opportunity to originate a moderate leverage mezzanine loan on a multifamily property located in the high barrier to entry market of Old Town Alexandria,” said Mesa West Executive Director Matt Snyder, who helped lead the Chicago and New York-based origination team along with Vice President Brian Hahn and Associate Jonah Sacks. “This has created a huge supply/demand imbalance for renters who want to take advantage of the neighborhood’s historic charm, strong retail amenity base and easy commute to Washington, DC and the area’s other major employment hubs.”
The financing was arranged by Joe Donato, Kevin Ridgway and Andrew Gaffney of Newmark.
