By Barbra Murray
With the assistance of Newmark Knight Frank, Acclaim Cos. has landed financing for the development of 855 Main St., a state-of-the-art office tower in Redwood City, Calif. Square Mile Capital Management provided the developer with a $65.7 million construction loan for the 100,000-square-foot speculative project.
Square Mile came through with a loan featuring competitive terms, and the investment manager did so expeditiously to accommodate the 855 Main development schedule. Square Mile, however, was just one of many lenders drawn to the opportunity.
“Acclaim’s exemplary track record and top-notch reputation resulted in a financing process that attracted significant interest from a variety of capital providers,” Chris Moritz, senior managing director with Newmark Knight Frank’s Northern California Debt & Structured Finance team, said in a prepared statement. Moritz’s colleagues Ramsey Daya, vice chairman, and Travis Bailey, director, completed the group representing Acclaim in the financing pursuit and closing.
Designed by DES Architects in the neoclassical style, 855 Main will also enhance Redwood City’s thriving downtown core with ground-level retail offerings. W.L. Butler is acting as general contractor for the project and if all goes as planned, the property will be ready for occupancy in the first quarter of 2021.
Power of the peninsula
NKF had a lot to work with when seeking financing for 855 Main on Acclaim’s behalf, including timing. “The market for spec construction has considerably evolved through the cycle. The availability of spec, non-recourse construction debt in a core market like Redwood City began to improve about three years ago, with one or two lenders pursuing these loans at lower leverage while pricing in a premium,” Daya told Commercial Property Executive. “About a year ago, we saw a few more players enter the market, helping compress pricing, and now, we see an average of four to five aggressive non-recourse quotes on these core spec office developments.”
The 855 Main financing increases NKF’s debt transactions for ground-up, speculative construction projects in the San Francisco Peninsula over the last 36 months to roughly 1 million square feet.
NKF has been active in capitalizing on the lending community’s attraction to the whole of the San Francisco Peninsula commercial real estate market all year. In June, the firm orchestrated an $81.5 million financing deal for Partners Group and EverWest Real Estate Investors’ acquisition of the 260,000-square-foot Burlingame Bay Office Park in Burlingame. Most recently, NKF arranged a $300 million refinancing package secured by a 1,154-unit, San Francisco multifamily portfolio on behalf of Trinity Properties.
Image courtesy of Newmark Knight Frank