Capital's Spring Awakening
They say that April showers bring May flowers, so hopefully Atlanta’s largest post-recession construction loan—$180M secured by Jamestown in a recap for the development of Ponce City Market—is only a sign of greater things to come. (Or at least an indicator that our azaleas are going to come in nicely.)
CBRE EVP Jeff Ackemann and SVP Jonathan Rice of the firm's Atlanta debt and structured finance group (above) helped advise Jamestown in the financing, which was led by PNC Bank in partnership with SunTrust and JPMorgan. Jeff says it's one of the most iconic, historic mixed-use developments in the Southeast and there was an incredible amount of interest in the loan. Ponce City Market has three things construction lenders clamor for: “terrific sponsorship, the right location, and a well-thought out development plan.” Jeff says the deal signals the reawakening of Atlanta’s construction lending market for retail, office, and industrial, following strong multifamily activity. (It's about time... it's taken a long enough nap.)
Lenders responded enthusiastically to the construction loan request, he says, recognizing the unique opportunity to be part of the project (above). Many of the interested lenders weren’t competitive enough or weren't the right players for the deal, he says, calling the project a “living organism that changes every day” and one that demands a nimble and thoughtful partnership of lenders. Slated for a fall 2014 rolling opening, the 1.1M SF Ponce City Market—a restoration of the former Sears building—will include 330k SF of boutique retail and restaurants, 517k SF of Class-A office, and 259 residential units. (Tenants already include Jamestown’s US corporate HQ, Athenahealth, Cardlytics, MailChimp, the Suzuki School, and Binders.)
The problem: There still aren't enough quality opportunities to meet the demand of capital that needs to be placed, Jeff says. That means lenders need to be aggressive. “We can get you to the right zip code, but you’ve got to prepare yourself for a lot of competition,” he says. Jeff’s already heading a robust pipeline: He’ll be coming to market in a few weeks with a large regional shopping center and a spec multi-tenant industrial park and has been helping a variety of clients with acquisition financing, he says. That means a lot of deals to celebrate—one of his new favorite post-closing spots is Kevin Gillespie’s Gunshow (which recently came in at No. 7 on GQ’s list of the 25 best new restaurants in America).