Life Company Commercial Mortgage Replaces Project’s Construction Loan with Permanent Financing; Gantry’s Significant Role in Stabilizing the Tower’s Financing Past Disruptions Both Pre and Post COVID are Testament to Firm’s Ability to Identify and Tailor Relevant Capital Solutions at Any Point in a Project’s Lifecycle to Achieve Sponsorship’s Investment Goals
(EDITOR’S NOTE: According to previous reporting by The Registry, the development team of The Molasky Group & Binjiang Tower Corp. is the project’s owner.)
Seattle, Wash. (September 15, 2021) – Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured $102.7 million in permanent financing from life company sources to retire and replace the construction loan for The Arrive Apartments & The Sound Hotel. Located in Seattle’s Belltown neighborhood, adjacent to Amazon’s three million-square-foot headquarters campus, the LEED-certified, mixed-use high-rise features 344 apartment units situated over the 142-key Sound Hotel.
Gantry’s George Mitsanas, Principal, and Josh Natker, Senior Associate, with the firm’s Los Angeles production office and Pat Taylor, Senior Associate with the firm’s Seattle production office, secured the loan on behalf of the property owner.
“We have always believed in the strong fundamentals of this tower and have dedicated ourselves professionally to seeing it through to fruition and successful operation as a key addition to the Seattle skyline,” said Gantry’s Mitsanas. “The timely decision of the development partners to take advantage of the attractive loan structures and rates in the current cycle and transition the project to a permanent loan resonates with our counsel on maximizing project returns through commercial mortgage finance and capital structure.”
Funding for the $102.7 million loan was placed with one of Gantry’s correspondent life company lenders that features a fixed-rate, interest-only payment structure. Gantry was also able to mitigate the impacts of early prepayment covenants on the existing loan in an amenable negotiation with the previous lenders. Gantry, which had originated and serviced the property owner’s original construction financing, will now service the new permanent loan.
“Quality sponsorship and diligent execution on the business plan for the asset provided the property owner with a compelling story that allowed us to secure what we characterize as optimized terms for their commercial mortgage structure,” continued Gantry’s Mitsanas. “From delivering this Class A project out of chaos, to bridging the operative disruptions of a global pandemic, the borrower has demonstrated the project’s strength and relevance time and time again. Quality sponsorship was the key in securing prime, permanent financing that will generate substantial savings moving forward and further improve investment performance.”
During the early phases of development in 2016, Gantry principals were instrumental in resurrecting the tower when a member of the original development team was removed from the project for misuse of funds. The subsequent receivership required not only halting all construction of the tower, but it also jeopardized equity capital from a cadre of Chinese EB-5 investors.
This critical moment was surmounted by Gantry articulating a complex restructuring to move the development forward by identifying and solidifying a new sponsorship structure, preserving original EB-5 investor equity, and then securing the 41-story tower’s construction loan to navigate the complex receivership requirements to full resolution.
Gantry’s structured finance work at that time resulted in a joint venture between two experienced real estate companies which then assumed sponsorship of the project and punctuated their commitment with a substantial deployment of equity paired to the preserved EB-5 foreign national investor equity. This experienced duo of high-rise development sponsors then finished construction and welcomed apartment occupants at the close of 2018, as scheduled and on budget, then opening the hotel to the public in early 2019 to mark the full completion of development.
Since that time in early 2019, the apartments have achieved near 97% occupancy, and the hotel as enjoyed a successful run as both a preferred business traveler and tourist hospitality destination with ready access to the key neighborhoods and attractions of urban Seattle. During the pandemic, the hotel suspended its operations until June of 2021. This timely decision to place permanent financing with life company lenders still resulted in significant savings via a superlative rate.
Gantry, a privately held company headquartered in San Francisco, is a full-service mortgage banking firm with an extensive lineup of correspondent lenders utilizing Gantry’s production, closing, and servicing capabilities. Established in 1991, Gantry is currently staffed by nearly 90 professionals in regional offices throughout the western United States and in New York. The company’s national servicing platform’s outstanding loan balance exceeding $17 billion represents more than 2,000 loans located in 43 states. Gantry 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 gantryinc.com.