DC Megadevelopment Lands $1B
Three major financial services firms co-originated the debt.
Less than two months after taking ownership of The Wharf in Washington, D.C., PSP Investments has secured a $1 billion refinancing note for 2.2 million square feet of space at the mixed-use property, according to a report by Fitch Ratings.
Wells Fargo, Goldman Sachs and Morgan Stanley subsidiaries co-originated the five-year, interest-only mortgage. However, the trio is looking to sell the loan as a CMBS loan. Midland Loan Services and KeyBank will act as master and special servicer, respectively. The deal is set to close on June 26.
READ ALSO: Will Economic Headwinds Blow Away CMBS Growth?
PSP Investments will use the CMBS proceeds, together with a $125 million mezzanine loan and $60 million in equity, to pay nearly $1.2 billion of existing debt and fund various tenant improvements, as well as create a rent gap reserve and cover certain commissions.
The debt serves as collateral for 928,154 square feet of office space, 446,764 square feet of retail, 904 multifamily units, 412 hotel keys, as well as 2,575 parking spaces and 218 boat slips.
The $3.6 billion mixed-use property has come online in two phases during the past 15 years. It occupies a mile-long stretch of land along the Potomac River, proximate to thoroughfares such as U.S. Route 1 and Interstate 395, which connect to the Greater Washington, D.C., area.
CRE debt markets start flowing
Both commercial and multifamily loan originations were up 42 percent during the first quarter compared to the same period last year, according to an MBA report. Notably, office loans spiked 205 percent, while retail notes were down 3 percent.
CMBS originations grew 37 percent, MBA’s report shows. Despite witnessing a thaw, the debt markets still hold pockets of distress as CMBS delinquencies reached 7.03 percent in April, the highest reading since January 2021, according to Trepp.
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