549-Unit Maryland Multi-Family Property Sees $95M Refi ...

By Barbra Murray, Contributing Editor

Forest City Enterprises Inc., owner of The Grand apartment property in Bethesda, Md., has secured $95 million in Fannie Mae financing for the 549-unit luxury high-rise, courtesy of a transaction closed by KeyBank Real Estate Capital.

?We?ve had a long-standing relationship with Forest City and were appreciative of the opportunity to assist them in refinancing the debt on this Class A property in Bethesda, ? David Schmidt, senior vice president and central region production manager at KeyBank Real Estate Capital, told Commercial Property Executive. Forest City developed The Grand, located less than 10 miles outside of Washington, D.C., at 5801 Nicholson Lane, in 1999 and in 2010, the company created a 50/50 joint venture with Bernstein Management Corp. for the ownership of the asset. According to Maryland property records, the premier 673,000-square-foot property, where 100 units are designated as affordable housing, has a base value of approximately $109.8 million.

The Fannie Mae financing comes in the form of a 10-year loan, with five years of interest-only. ?This transaction allowed the borrower to consolidate the first mortgage and supplemental loans into one mortgage, while continuing to provide and support affordable housing initiatives in the community,? Schmidt said.

In recent months, there has been no shortage of Fannie Mae financing for apartment assets in suburban Washington, D.C. This month, Beech Street Capital L.L.C. revealed that it had provided an $18.9 million conventional loan for a repeat borrower?s acquisition of the 180-unit Mallard Courts in Alexandria, Va., and Red Mortgage Capital L.L.C. announced the funding of an approximately $41.2 million loan for Associated Estates Realty Corp.?s 250-unit Dwell Vienna Metro Apartments in Fairfax, Va.

The current state of the rental market in metropolitan Washington, D.C., undoubtedly provides lenders with a certain level of comfort. In the first quarter, the vacancy rate in Maryland dropped 20 basis points to 4.1 percent and in Virginia, it held steady at 3.8 percent, according to a report by Marcus & Millichap Real Estate Investment Services. Additionally, effective rents in the respective markets increased 0.8 and 0.6 percent.

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