CBRE Arranges $181M Washington D.C. Financing

CBRE Capital Markets arranged $181 million in financing for the first two phases of Sentinel Square. Sentinel Square is a multi-phased, 1.3 million-sq.-ft. office development located in the heart of the NoMa submarket of Washington, DC. CBRE worked exclusively on behalf of the Trammell Crow Co., Crow Holdings Capital Partners LLC and Cottonwood Partners to arrange the financing.

The financing was arranged in two loans, one to refinance 90 K Street, NE, the second to fund the construction of 1050 First Street, NE. Financing was provided by Landesbank Hessen-Thüringen Girozentrale and Norddeutsche Landesbank Girozentrale.

“This financing provided a flexible structure allowing the borrower to monetize the value created through the successful development and lease up of 90 K Street and begin development of 1050 First Street on a speculative basis,” Joe Donato, executive vice president of CBRE Capital Markets group said in a statement. “ While non-recourse speculative development financing is rare, the success demonstrated by the borrower with phase one of Sentinel Square combined with the impressive growth of the NOMA submarket provided the right combination to secure the financing.”

Phase one of Sentinel Square, 90 K Street, is a 12-story class-A office building, that was delivered to the market in June 2010. The property is the first-phases of a development and with tenants including the U.S. Department of Veterans Affairs, the U.S. Parole Commission, Customs and Border Protection and the U.S. Department of Homeland Security. The $111 million loan on 90K Street funded the repayment of the existing construction loan while also monetizing the value that the borrower created through the lease up of the property.

The second phase of Sentinel Square is 1050 First Street. It will be a 278,817-sq.-ft. class-A office building built upon the identical fundamentals of 90 K Street, NE: a high security, environmentally sensitive office building that not only will appeal to the federal government, but also to the private sector. The $70 million loan provided the necessary funding for the borrower to develop 1050 First Street on a speculative basis.

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