The owner of CityCenter, one of the largest mixed-use developments in downtown D.C., has secured a major refinancing deal nearly a decade after the project delivered.
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Hines obtained a $300M loan from JPMorgan Chase backed by CityCenter's office and apartment components, a spokesperson for the developer confirmed to Bisnow. The debt refinances Hines' previous loan of $430M, also provided by JPMorgan, the spokesperson said.
"Arguably one of the top mixed-use projects in the US, the refinancing efforts faced significant market headwinds, particularly in the office component," the spokesperson said in an email, adding that it secured the financing by marketing the property's 100% office occupancy and 93% retail occupancy.
The loan is backed by the development's two 11-story office buildings totaling 522K SF and 192K SF of retail. The office is anchored by law firm Covington & Burling LLP, which brought more than 1,100 employees to the development when it inked a 20-year lease for 420K SF in 2012. The firm moved into the project when CityCenter opened in 2014.
Hines Senior Managing Director Andrew McGeorge first announced the refinancing deal in a LinkedIn post on Monday morning.
"This accomplishment not only underlines our steadfast commitment to growth and operational excellence but also emphasizes the confidence and support lenders have shown in major investors within our sector," McGeorge said in the post.
Loans of this size have become a rarity in capital markets today, especially in the struggling office sector. In the third quarter, overall lending and office lending were both down 49% year-over-year, according to the Mortgage Bankers Association’s quarterly survey.
CityCenter encompasses 2.5M SF across 10 acres. Phase 1, part of which secured this latest refinancing, also includes 216 condos, an open-air courtyard and 192K SF of retail. The development is known for luxury brands like Chanel, Dior, Tiffany & Co. and Louis Vuitton.
Restaurants include Amy Brandwein’s Piccolina and Centrolina, as well as Mediterranean restaurant Fig & Olive and gelateria Dolcezza. In 2022, Boston-based bakery chain Tatte moved into 11K SF formerly occupied by Momofuku, which closed at the beginning of the pandemic. Enrique Limardo's Seven Reasons is set to move from its now-closed 14th Street location to 8K SF at CityCenter in the coming months.
The Museum of Illusions opened in 6K SF at CityCenter last December.
CityCenter's Phase 2 hotel component from a partnership between the Qatar Investment Authority and Hines broke ground in 2016. The 360-key Conrad hotel with rooftop restaurant Estuary and 30K SF of retail delivered in 2019.
Plans for Phase 3 at 900 New York Ave. NW, still on the boards from a partnership between Gould Property Co. and Oxford Properties Group, include 500K SF of office and 40K SF of retail.
CORRECTION, NOV. 30, 3:10 P.M. ET: Hines refinanced the office and retail portions of City Center. A spokesperson for the developer previously said the refinancing was tied to the office and residential components. This story has been updated.)
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