Seattle–Commercial mortgage banking firm Newmark Realty Capital Inc. has structured and secured $325 million in funding for a once-stalled Seattle development project. Situated in downtown Seattle’s Belltown neighborhood, the 41-story, mixed-use multifamily and hotel tower will include 339 apartment residences, 142 hotel rooms and 1,824 square feet of ground-floor commercial space.
Included in the project funding is a $225 million joint-venture partnership involving Las Vegas, Nev.-based Molasky Group and Hangzhou, China-based Binjiang Group, as well as a $100 million construction-to-permanent loan. The funding will support development of the as-yet-unnamed property formerly referred to as Potala Tower.
Circumstances involving the original developer led to the development being placed under control of a court-appointed receiver. Construction was suspended for approximately12 months. The Newmark-arranged joint-venture development partnership acquired the property from the receiver in early autumn, 2016.
Construction has resumed on the development, with project design being provided by Seattle-based Weber Thompson Architects. Denver, Col.-based PCL has assumed the general contractor’s responsibilities. Slated for completion in August 2018, the development is designed to meet LEED Silver Certification standards.
“The hurdle was getting court approval to pick a new development team,” Los Angeles-based Newmark principal George Mitsanas told MHN. “The original limited equity partner was Binjiang Group. When the original developer had problems with the SEC, Binjiang Group reached out to get my counsel on how to resurrect the deal. I suggested they bring in Molasky, an outstanding group of people with great experience in this area.
“A tremendous amount of credit should go to Baker McKenzie, an international law firm, for its role working with the federal court and receiver in dealing with all legal matters. I work with law firms every day; in my opinion this transaction would never have come together without Baker McKenzie and its expertise in dealing with the federal court.”
The $100 million construction-to-permanent loan was placed with two of Newmark’s correspondent life insurance company lenders, Guardian Life and Voya Investment on a pari-passu basis, each lender providing $50 million financing. The loan will be interest-only for a period of time and later amortized over 30 years, with Newmark as servicer.
Mitsanas lauded Newmark’s life insurance company investors, which he characterized as sophisticated and knowledgeable in real estate investment.
“Our development team, lending group and all third-party professionals involved were fantastic companies and people to deal with throughout the process,” Mitsanas said. “[This is] a first-class group of professionals. This project will also be a significant job creator both during construction and once completed.”
Mitsanas added his firm was picked for the challenging assignment based on its team of seasoned mortgage bankers, as well as its national lineup of correspondent lending relationships. “We have contractual relationships with lenders to procure high-quality investments, negotiate, close and ultimately service the investments,” he said.