Monday Properties, a long-time office owner in Rosslyn, Va., recently refinanced debt on 1812 North Moore Street and a nine-property portfolio of buildings in the Washington, D.C.-adjacent market. The New York-based investment and development company, which already liked the city’s demographics and proximity to Washington, D.C. , found its lenders shared its favorable view of Rosslyn, as evidenced by loan terms and pricing achieved, according to Anthony Westreich, founding managing partner.
“We had three different loans on our 10 building portfolio all maturing in 2017. We were fortunate that the maturation of those loans coincided with a favorable debt market,” Westreich said. “Our lenders shared our vision and belief – the Rosslyn submarket is on a strong path of recovery and continues to be poised to be one of the more desirable parts of the overall greater Washington, DC area.” The company’s loans included good news leasing provisions, which will allow Monday Properties to tap into capital when major leases are signed with credit tenants, he added.
Westreich and Tim Helmig, managing partner, discussed with REFI what’s going on in Rosslyn and what’s next for Monday Properties there and farther afield.
REFI: What’s it like to be a borrower for office properties in Rosslyn?
AW: The lending market is a tale of two cities. You have some borrowers with a lot of options who are able to source competitive loans with the right terms and then there are others who have a much harder time. Our timing on refinancing [on our Rosslyn properties] couldn’t have been better. We outperformed our expectations on the rates and terms of the debt we received.
TH: What created an opportunity for us in these two loan packages is that the capital markets take into account the unique advantages or disadvantages of submarkets like Rosslyn. Rosslyn has been seeing a lot of momentum and, over the past 18 months, we’ve done 750,000 square feet of leasing. That speaks to the strength of the market. Rosslyn presents access to incredible work talent that includes the largest concentration of Millennials within the broader D.C. market. I think when you combine those factors, lenders like the opportunity to finance an office building in a market place like that.
REFI: Tell me about 1812 North Moore – what stands out about the property?
TH: We developed the property from the ground up. It’s on top of the Rosslyn Metro station, which is one of the busiest in the entire network and sees about 30,000 passengers daily. It’s a trophy, high-performance building that’s LEED Platinum certified. The floor plates are also extremely flexible and adaptive to different strategies. It’s also the tallest building in the Rosslyn market, which means that it’s got a prominent location and incredible views. Nestle is the anchor tenant in the building and was attracted not only by its commitment to sustainability but also the building’s high performance design and Rosslyn’s access to talent and lifestyle. The results of that 15-year lease helped to give us very attractive debt terms.
REFI: I’ve been reading about the amenities package, which includes a cycle studio. Why this mix of amenities?
TH: We’re curating almost 20,000 square feet of amenities. The 24 floor is a transition floor between the high- and low-rise part of the building and it will have a 200-person meeting facility, a sky lounge with entertainment facilities, and smaller meeting areas and seating zones. There will be wine and beer bars too. The 11th floor will have a wellness center that will include a SoulCycle-style studio, yoga, and Pilates. There will also be traditional fitness facilities.
AW: It is also important to note how thoughtful Arlington County has been with its urban planning. In D.C., no building can be taller than the U.S. Capitol Building. But if you’re a tenant in 1812 North Moore, you’re in a 390 foot tower building with unobstructed views of the D.C. monuments, the Kennedy Center, Georgetown and so many other magnificent aspects of the D.C. area.
REFI: In general, what are your tenants asking for?
TH: Tenants are seeking a landlord who can be nimble and adapt its operating strategy to tenants evolving needs. There are tenants that require strong collaborative space that want a more open-plan setting, with meeting and breakout rooms. Then there are more traditional tenants who still rely on or enjoy private office layouts. Because of our flexible operating platform we are nimble and can adapt to various types of design execution and the growing needs of tenants.
REFI: What else is going on?
AW: We just bought a portfolio of assets in Alexandria, Virginia and an office building in Laguna Hills, California that we’re very excited about. In addition, we are under contract for another office building in Los Angeles. We’ve made a lot of key hires over the past 18 months and we will soon be announcing a few more. All of which we we believe will help us to grow over the next several years.