Washington, DC–Donatelli Development has obtained equity financing for the next phase of its Highland Park development, a 144-unit apartment building, to be located above the Columbia Heights Metro station in Washington, D.C. The developer has also recapitalized the mezzanine and senior debt for the existing 229-unit Highland Park building.
Invesco Real Estate provided the equity for the new development and mezz debt for the existing building, while Key Bank restructured the senior debt. Cassidy Turley acted as advisor to Donatelli Development on the equity and debt financing.
“Equity and mezzanine debt financing has been consistently improving for multifamily properties in recent months–relative to high- and lesser-quality properties,” David Webb, senior managing director and principal with Cassidy Turley, tells MHN. “Cap rates for existing assets have gotten so competitive that many equity sources have all but given up trying to make returns work for them, looking instead to ground-up or repositioning plays with higher returns.”
Highland Park features a mix of unit types and has a 20 percent affordable component. The existing building is currently 99 percent leased, and construction of the new phase is slated to begin during the first quarter of 2011. The property offers a two-story fitness center, high-tech party and billiards rooms, and a rooftop deck with panoramic views, among other common amenities.
Besides being in close proximity to a Metro station, the Highland Park development also sports about 18,000 square feet of ground-floor retail, including Potbelly Sandwich Works, Five Guys Burgers and Fries, Tynan Coffee and Tea, Signal Financial, Pete’s New Haven-Style Apizza and CommonWealth Gastropub.