By Scott Baltic, Contributing Editor
Cleveland—BGL Real Estate Advisors LLC has completed the arrangement of $81.0 million in development financing for Weston Inc.’s conversion of the historic Standard Building in downtown Cleveland into high-end apartments, BGL announced Tuesday.
The multi-faceted capital structure consists of:
- Senior construction debt;
- Subordinated bridge debt;
- Municipal city and state agency debt;
- Federal and state historic tax credit equity; and
- Weston Inc. GP equity.
The financial institutions included were Huntington National Bank, Fifth Third Bank, First Commonwealth Bank, Peoples Bank and Cleveland Development Advisors, while the Ohio Water Development Authority and Ohio Development Services Agency also were represented in the transaction. Piper Jaffray, the Port of Cleveland, RSM US LLP and Stonehenge Capital were involved with the capital lease and historic tax credit equity structuring and syndication.
Originally built for Standard Bank in the 1920s, the 20-story Standard Building is being converted from its current use as Class B office space into one- and two-bedroom market-rate luxury apartments, with first-floor retail.
“The addition of apartments to Cleveland’s critical mass is important for the development of the city, and this transaction has allowed us to successfully contribute to it,” Weston chairman T.J. Asher said in a prepared statement.
Neither BGL nor Weston provided Commercial Property Executive with requested additional information, such as the current timeline for the redevelopment project.
With employment up 1.8 percent this year in Cleveland, the demand for apartments is strong, according to a second-quarter report from Marcus & Millichap, which notes that “In particular, many corporations are increasing their presence in the downtown area in order to appeal to young professionals seeking a live-play-work lifestyle.”
The report specifically highlights the renovation of numerous older downtown office and retail buildings into high-end rentals and mixed-use spaces. But despite this activity, demand is expected to outpace supply, resulting in tighter vacancy and average rents that continue to climb.
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