Simon Lines Up $465M Refi For Pentagon City Mall, Office And Hotel
The owners of a trio of properties just south of the Pentagon are preparing to close on a $465M refinancing deal.
Simon Property Group and Institutional Mall Investors have lined up a $465M loan for Fashion Centre at Pentagon City and an adjacent office building and hotel, according to a Fitch Ratings presale report. Fitch expects the loan to close next month.
The office building is the 168K SF Metro Tower at Pentagon City, and the hotel is the 366-room Ritz-Carlton Pentagon City, for which the partnership owns the land and holds a ground lease.
The loan is set to be originated by Goldman Sachs Bank USA, Wells Fargo Bank N.A. and Barclays Capital Real Estate. It has a five-year term and interest-only payments.
The owners are putting in an additional $29.9M of sponsor equity along with the loan. The funds are slated to go toward refinancing $455M of debt and covering $26.6M in outstanding tenant improvements and leasing commissions, $3.3M of gap and free rent, and closing costs.
Simon didn't respond to a request for comment. The California Public Employees' Retirement System, which is part of the IMI venture along with Miller Capital Advisory, declined to comment.
Simon and IMI secured the previous $455M loan from Wells Fargo in 2021. The deal had a three-year initial term with two one-year extension options.
The Fashion Centre property, built in 1988, has 140 retail and restaurant tenants.
Anchor tenant Macy’s owns its improvements, while Nordstrom owns its land and improvements. The mall was 99% leased as of January, and its in-line sales of $1,024 per SF during 2025 are more than double the national average, according to Fitch.
The mall's other tenants include Zara, Victoria’s Secret, Uniqlo, Express and American Eagle Outfitters. Dublin-based retailer Primark has inked a lease at the former Forever 21 space that begins in March 2027. Lacoste, Nova Jewelers, Takumi Tamashi, Perfumania and Gatcha are set to open at the mall in the coming months.
“The mall has a diverse tenant base, consisting of national retailers and popular contemporary brands, in addition to dining options,” Fitch’s presale report says. “The sponsor’s merchandising strategy is to continue to attract unique, first-to-market retailers, leverage the draw from the food court and add entertainment offerings.”
The office building, Metro Tower at Pentagon City, was also built in 1988. It is 75% occupied by a single office tenant, the Rand Corp. The property’s top three floors are vacant.
Rand, a public policy research nonprofit, has been at the property since 1999, and its 127K SF includes a fifth-floor sensitive compartmented information facility. The company just inked a renewal through June 2042, and it is in the process of renovating each of its floors, with the help of a $24.1M tenant improvement package, according to the Fitch report.
The ground lease for The Ritz-Carlton began in 1990 and runs through 2040, and it has a fixed base rent of $640,500. Fitch said it is “the only luxury hotel in the Arlington hotel submarket.”
“This benefits the hotel’s position as the only luxury choice for travelers preferring the proximity to Washington, D.C., without the need to stay within the CBD area,” the report says.
The trio of properties was valued at $777.7M as of February.
Last month, Simon and IMI secured a $1.2B CMBS loan to refinance Texas' largest mall, The Galleria, which spans 2M SF.
