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Cushman & Wakefield is helping arrange a $526M construction-to-permit loan to Kemper Development that will expand Seattle's 4M SF Bellevue Collection mixed-use complex by 1.5M SF. As noted by C&W executive managing director David Karson, financing for the Lincoln Square Expansion was provided by the Canada Pension Plan Investment Board, but the size and nature of the financing is unusual for the market, and thus C&W’s assistance was required. The loan features a fixed, three-year interest rate and will then be converted to four distinct long-term loans, eliminating interest rate and liquidity risk, even if the expansion fails. The single-point loan through CPPIB’s subsidiary—CPPIB Credit Investments—is considered to be one of the largest in the region’s history. David admits the loan was a hard sell, and C&W had to search all across the globe looking for a group that could sustain a $500M or $600M loan and have a long-term source of capital. CPPIB—the “Social Security of Canada”—is now the pioneering leader of this kind of capital, and David believes many other groups might follow suit. The Lincoln Square Expansion—a 41-story multifamily/W Hotel tower, a 31-story office tower and a three-level retail podium anchored by a theater and chef-driven restaurants and sitting above a six-level, 4,000 space parking garage—is already in progress. [GS]
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