Monday Properties Refinances Rosslyn Portfolio

Monday Properties has refinanced debt on a portfolio of nine office buildings in Rosslyn, Va., consolidating maturing mortgages on the properties into a roughly $888M financing. The lender, an unnamed debt fund, originated a $700M mortgage and a $188M credit facility that Monday Properties will use to renovate and re-lease the space in the roughly 2.6 million square foot portfolio. “The financing reinforces our commitment to the portfolio and the Rosslyn market, where we’ve leased 650,000 square feet of space over the past 18 months,” said Anthony Westreich, founding managing partner.

The properties (see list) are a mix of Class B 1970s vintage properties and newer Class A product that was developed in the 1980s and 1990s, Westreich told REFI. “Our business plan is to continue to enhance, amenitize, and lease up the properties to capitalize on what’s going on in Rosslyn. The Rosslyn submarket has gone from being a largely GSA-driven market to one that’s full of corporate, institutional-type tenancy. The landscape has shifted dramatically,” he said.

This shift is exemplified by major corporations that have been relocating to or leasing substantial space in Rosslyn, including PwC, Grant Thornton, Sands Capital, and Nestle, Westreich noted. Nestle is relocating its headquarters 1812 N. Moore Street, a Monday Properties-owned 35-story tower in Rosslyn. The company will occupy about 206,000 square feet of space in the property, with an option to expand by another 120,000 square feet, according to published reports.

Plans for the building include adding amenities. “To be competitive in Rosslyn and Washington, D.C., roof decks are important and allow you to lease a building much more quickly and at a higher rent,” Westreich said. “Share conference facilities, flex office space, and retail that’s conducive to the tenancy of a building is also important.”

Monday Properties worked with Eastdil Secured, which is familiar with the portfolio, to arrange the financing and selected its lenders given their sophistication. “These buildings have vacancies and have capital needs that will be necessary to tenant them,” Westreich said. “We needed a lender who understood the real estate and this group is as sophisticated as they come. Their loan terms and the economics of their offer really stood out.”

The company fielded multiple offers for the financing, which demonstrates demand for well-located assets in growing markets, Westreich said. “It’s a great time to be a borrower – you’ve got access to a cheaper cost of capital if you have the right kind of asset and there’s no shortage of lenders out there,” he added. “We’re also eight years into a bull market for real estate and at this point, there seems to be more capital available to invest in debt than equity.”

The previous loans included one CMBS loan on three properties and other loan originated by Starwood on the remainder of the assets. The current lender, which split the $700M loan into A and B notes, likely will securitize the senior portion and retain the remainder, Westreich said.

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Portfolio snapshot:

1000 Wilson Boulevard

1100 Wilson Boulevard

1101 Wilson Boulevard

1200 Wilson Boulevard

1400 Key Boulevard

1401 Wilson Boulevard

1501 Wilson Boulevard

1515 Wilson Boulevard

1701 N. Fort Myer

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