Owners of East Coast’s Largest Timber Building Land $65M Refi

Apex Plaza. Image courtesy of Northmarq

Northmarq has arranged a refinancing package for Apex Plaza in Charlottesville, Va., the state’s first large-scale mass timber project and the largest timber building on the East Coast. Northmarq acted on behalf of the borrower, Apex Clean Energy, securing $65 million for the 265,000-square-foot headquarters and multi-tenant office building through a regional bank.

While the office sector may not be the darling of the lending community in comparison to multifamily and industrial product, Apex Plaza is a star in its class and likely attracted a great deal of attention among potential lenders. Development and construction firm Hourigan teamed with Riverbend Development to bring Apex Plaza to fruition in December 2021. And in addition to being brand-new, the project is well-located, well-leased and unique—a lender’s dream, essentially.

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An eight-story, cross-laminated timber structure sited across from Charlottesville’s Downtown Mall, Apex Plaza consists of 151,000 square feet of office space atop a 102,000-square-foot concrete parking podium and 6,800 square feet of ground-level retail. Apex Clean Energy serves as the tower’s anchor, occupying an 84,000-square-foot headquarters space. The project’s general contractor, Hourigan, also calls Apex Plaza home, as does its architect, William McDonough, and the Southern Environmental Law Center, among others.

Perhaps the property’s most notable feature is its sustainability. Aside from its leadership in the timber development world, the office building is adorned with an 875-panel solar installation that produces energy equivalent to the amount that Apex consumes annually, leaving the company with net-zero electricity usage. Additionally, Apex Plaza features a green roof that allows for biodiversity and stormwater retention.

A thriving office market

While the majority of the U.S. office sector continues to struggle in the post-pandemic era, the Charlottesville office market is faring relatively well. The city’s overall vacancy rate was just 4.1 percent in the third quarter of 2022, according to a report by Cushman & Wakefield/Thalimer. Additionally, large blocks of space are in short supply; just three such locations over 20,000 contiguous square feet were available in the third quarter, two of which were sublease options. And the future looks bright for the Charlottesville office market as well.

“Leasing activity remains strong with 17 percent more deals completed year-to-date than during the first three quarters of last year,” the report shows. “While the average deal size has decreased 16 percent year-over-year, vacancy numbers are forecast to continue to fall as deal volume is projected to grow.”