A major Northern Virginia real estate developer has turned to the CMBS market to refinance two of its prized office assets.
Monday Properties has secured a combined $207 million to refinance its luxury office tower at 1812 North Moore Street in Arlington, Virginia, and Shirlington Gateway, a 206,000-square-foot medical office building, Commercial Observer reports.
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Citi Real Estate Funding provided two five-year, fixed-rate commercial mortgage-backed securities loans to recapitalize two properties. Citi refinanced 1812 North Moore Street for $173 million and Shirlington Gateway for $32 million.
Anthony Westreich, founding managing partner of Monday Properties, told CO that Citi was the original lender for 1812 North Moore Street, and his firm refinanced Shirlington Gateway with the bank in December, so it made sense to combine the refinancing with Citi in a CMBS deal.
“We just closed a fundraise working with the Shirlington Gateway refinancing team. We placed a sole order with them in late January and they delivered a great run,” Westreich said. “The CMBS market is pretty liquid for the right type of assets and the right type of sponsor.”
The successful refinancing of 1812 North Moore Street comes after a tumultuous December in which Westreich successfully fought off a foreclosure auction for the 35-story office building.
RBC Real Estate Capital Partners, the lender on the building's mezzanine floor, has decided to expedite a Uniform Commercial Code (UCC) foreclosure on the 581,000-square-foot property, scheduled for Dec. 18, 2023, according to the offer from Eastdil Secured.
The building's anchor tenant, covering more than 325,000 square feet, is Nestle USA, along with health insurance company Humana and medical technology company Cerner, which together occupy 76 percent of the building.
Westreich has since moved to fill the remaining space in what he calls the “crown jewel” of his portfolio.
“Since the December 2023 roundup, we’ve probably leased close to 60,000 square feet. [and are] “Right now it's about 90 percent leased,” Westreich said, adding that only two floors remain vacant in the 10-year-old building. “I'd be lying if I said leasing was easy, but what we're seeing is a flight to quality. Tenants have options, and they're definitely moving to buildings that are best-in-class in terms of light and airiness, efficiency and amenities. So we're happy to see that migration.”
The 206,200-square-foot Shirlington Gateway is located at 2800 Shirlington Road in Arlington. Westreich described the glass office building as “our go-to little workhorse.”
“Loans were coming due and the CMBS market was liquid, so we turned to them. [at Citi] “We've had some pretty good execution there,” he said, “and thankfully we've also had some pretty stable, consistent leasing on that asset.”
Brian Pascus can be reached at bpascus@commercialobserver.com