September 19, 2017
Prime Rate
4.25%
1.24%
2.22%
2.19%
Photo of 1601 Wewatta
Property Type
Office
Transaction Details

$69,500,000 Construction
Life Insurance Company

Transaction Name
1601 Wewatta
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Transaction Details

1601 Wewatta is a newly-constructed, Class AA office building located adjacent to Union Station in downtown Denver, Colorado. The 10-story, super core office asset consists of 299,990 square feet, including 17,400 square feet of ground floor retail. 1601 Wewatta was developed in partnership between Hines, Jordon Perlmutter & Co., and an institutional investor managed on behalf of JPMorgan Asset Management. The building features best-in-class characteristics including large efficient floor plates (almost 32,000 square feet), 10' ceilings with full-height glass walls, outdoor terrace space on select floors, and a superior location in the heart of lower downtown Denver.

The Proposition

The development team hired Essex to source non-recourse construction-to-permanent financing for 1601 Wewatta, which was a purely speculative development with no pre-leasing. The objectives were to minimize the recourse to only a construction completion guaranty, fund the loan without any preleasing requirements, and fix an interest rate for at least 7 years to align with the potential holding strategy.

Our Solution

Essex arranged a 7-year, non-recourse construction-to-permanent loan with a life insurance company. The fixed-rate loan had an earn-out provision, which increased the loan on a percentage basis, if certain leasing metrics were accomplished during construction. The fixed-rate balance sheet loan also had prepayment flexibility in Years 5-7, allowing flexibility in the Borrower's exit strategy.