To Get The Money, You Gotta Have a Story
There's an abundance of capital out there looking to finance the right deals. But to lock down the cash, especially for condo projects, developers need to sell a special niche to lenders, says CBRE's David Webb (with colleague Jamie Butler). David says projects need a unique location or story that "jumps off the page." Take Persimmon Capital/1788 Holdings' under-construction Lauren condo project on Hampden Lane in Bethesda, for which David and Jamie just arranged $66M in financing. The urban location and large unit sizes (an average of 3,000 SF) were much more attractive to the financing community than smaller, older, commodity buildings. (Apollo Commercial Real Estate Finance was the lender.)
But it's not just large units that score financing, David says. He, Jamie, and team also arranged financing for the Mike Balaban-Frank Saul-led SB Urban on its revamp of Georgetown's Latham Hotel into microunit residential. "Money today isn't more expensive than it used to be, capital is just always looking for something different," says David. And the threat of rising interest rates won't hurt projects in need of financing too badly, he adds, as long as the rise is a gradual one.
