New Joint Venture Resurrects Stalled Project in Belltown Submarket; Secures Favorable Construction-to-Permanent Loan from Two of Newmark’s Correspondent Life Insurance Lenders
SEATTLE, WASHINGTON – Newmark™, the largest independent commercial mortgage banking firm in the western United States, has structured and secured $325 million of development funding for a 41-story mixed-use multifamily and hotel tower located in the Belltown submarket of downtown Seattle. The project financing includes a $225 million joint-venture partnership arranged between the Molasky Group of Las Vegas, NV., and Binjiang Group of Hangzhou, China, and a $100 million construction-to-permanent loan to develop the as yet-to-be-named property, formerly known as Potala Tower.
“This was an extremely complex capital stack and deal structure with many moving parts,” said George Mitsanas, Principal with Newmark. “The project faced numerous hurdles, including salvaging the principal of original investors who are now represented by the new joint venture. Newmark has decades of experience in arranging complex financing and creating joint ventures for institutional investors, and we applied that experience and stewardship to resurrecting this unique project. We had a talented and dedicated team of people involved in making this transaction a reality.”
Due to circumstances concerning the original developer of the project, the project was put under the control of a court-appointed receiver and construction was suspended on the project for approximately one year. The joint-venture development partnership, arranged by Newmark, acquired the property from the court-appointed receiver in October 2016. Construction has resumed at the project and is now underway, with Denver, CO-based PCL as the general contractor and project design from Seattle’s Weber Thompson architects. The tower will feature 339 apartment units, 142 hotel rooms, and 1,824 SF of ground floor retail space. The project is designed to meet the LEED silver certification standard and is expected to be completed by August 2018.
The Newmark team was led by George Mitsanas, Principal, Peter Hillakas, Vice President, and Doug Tisdale, Associate, from Newmark’s Los Angeles office. Joining them in completing this transaction was Mike Taylor, Principal, and Patrick Taylor, Associate, from Newmark’s Seattle office. The $100 million construction-to-permanent loan was placed with two of Newmark’s correspondent life insurance company lenders, Guardian Life and Voya Investment, on a pari-passu basis with each lender providing $50 million in financing. The 7-year construction-to-permanent loans will be interest-only for a period of time and later amortized over 30 years. Both loans will be serviced by Newmark.
“Both our development team, lending group, and all third-party professionals involved were fantastic companies and people to deal with throughout the process. A first-class group of professionals! This project will also be a significant job creator both during construction and once completed,” said George Mitsanas.
Newmark, a privately held company based in San Francisco, is a full service mortgage banking firm with an extensive lineup of correspondent lenders utilizing Newmark’s production, closing and servicing capabilities. Established in 1991, Newmark is currently staffed by over 60 employees in regional offices throughout the western United States. The company services nearly $10 billion representing over 1,100 loans located throughout the country. Newmark is rated as a Primary Servicer by Standard & Poor’s and is one of a select few non-banking/non-insurance chartered companies with this designation. For more information please visit www.newmarkrealtycapital.com.
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