Crosstown Concourse, a 1.2-million-square-foot premier adaptive reuse project in the heart of Memphis, Tenn., has received $85 million in permanent financing.
HFF worked on behalf of the borrower, a joint venture between Crosstown, LLC, Crosstown Arts, and Kemmons Wilson Companies, LLC, to secure the 0-year, fixed-rate permanent loan through JP Morgan Asset Management.
The 1.2-million-square-foot Crosstown Concourse is an historic adaptive reuse of a one-time Sears Roebuck & Co. catalog order plant and retail store situated on a 12-acre property. This is the largest historic adaptive reuse LEED Platinum redevelopment in the world.
Now redeveloped into a “vertical urban village,” the structure built in 1927 features almost 646,000 square feet of commercial space, 65,000 square feet of retail space and 265 apartment units averaging 1,044 square feet in size. The development includes repurposed architectural pieces from the 1920s, multi-story atriums, windows drawing natural light, two acres of public plazas, a performing arts theater and 25,000-square-foot fitness center.
Crosstown Concourse’s diverse tenant mix includes Methodist Le Bonheur Hearthcare, ALSAC-St. Jude, Church Health, Crosstown Arts, Cristian Brothers University, Crosstown High School and others.
Rental income sources
The debt placement team included Senior Managing Directors Brian Carlton and Jason Nettles in the Dallas office of HFF.
“It was difficult because it was a large loan for a market like Memphis and in the inner city,” Carlton told Multi-Housing News. “It had several different uses—office, residential, retail, etc.—for a lender to get comfortable with as well. And the borrower structure was challenging because there are some tax credits and grants that are in place for several years before burning off. HFF helped the lender get comfortable with their basis in the real estate, and the cash flow that the asset provides through the various rental income streams.”
Ongoing events and programs in neighborhood-like shared spaces and common areas link the residents, tenants and the average 3,000 people who visit the 95-percent leased property daily. Crosstown Concourse is a catalyst spurring revitalization and economic development in the surrounding Crosstown neighborhood in the heart of Midtown Memphis, two miles from downtown and two blocks from the intersection of I-40 and I-240.
Earlier this month, HFF facilitated $341 million in construction financing and joint venture equity for a 114-unit luxury condominium tower in Boston.
Image courtesy of HFF