Steve Witkoff.

His partner, Scott Alper, and his personal assistant each stopped by the room twice to remind him about various appointments on his schedule, and Mr. Witkoff bounced between conversations about meeting an inspector in the city the next morning, picking up a friend of the family on his way home, heading down to Florida the following Monday to take care of more business before “hitting some golf balls” and the best way to approach potentially sensitive questions.

Mr. Witkoff, 56, has stayed active in the New York and Miami real estate arenas, among others, through their respective ups and downs. Not only as an owner, operator and leaser of high-end properties, including 1745 Broadway, 10 Madison Square West and the landmark Woolworth Building, but also as a developer who continually oversees new construction projects, from legal and safety compliance to financing each development through its various phases.

Several of those construction projects have been notable not only for their scope but also for what they represent: the return of successful financing for high-profile condo construction, at least for the right borrower and the right project.

Condo construction financing in New York City hit a brick wall during the economic downturn and has rebounded only for top-ranking developers, such as Mr. Witkoff and Gary Barnett, whose Extell Development Company is behind One57.

And with relationships key to getting deals inked, the Bronx-born Mr. Witkoff proudly boasts about putting deep relationships with his lenders above all else. Those lenders include M&T Bank’s John Cook, Gino Martocci and Peter D’Arcy, as well as Wells Fargo’s Alan Wiener and Michael Kaczynski, whom Mr. Witkoff calls “dear friends.”

“We do business with other banks too, but we’ve invariably done more of our business with Wells and M&T because we enjoy that relationship,” he told The Mortgage Observer on a cool spring evening on the 15th floor of 130 East 59th Street. “They do what they say they’re going to do and we try to return the favor. In fact, we try to return the favor even more.”

M&T and Wells Fargo provided the bulk of the construction loans for 150 Charles Street in Manhattan’s West Village, which the Witkoff Group originally purchased in 2004 and secured construction financing for at the end of 2012. Mr. Witkoff had gone through a previous round of loan negotiations in 2007 before the project was stalled, he said.

The project hit several road bumps along the way, beginning with the financial crisis and followed by protests and a lawsuit by neighbors who alleged that the Witkoff Group had torn down an on-site building it was supposed to expand rather than destroy.

That lawsuit was later dismissed.

Construction on the luxury condominium is now finally under way and slated for completion in the final quarter of 2014. The 16-story brick-and-glass building is set to include 40,000 square feet of outdoor space with a courtyard garden, valet parking and a 75-foot lap pool lined with mosaic stone. Market prices range from $3 million to $6.5 million for one- and two-bedroom units and between $6.5 million and $9 million for three-bedroom units. A five-bedroom, five-and-a-half-bathroom penthouse is on the market for $35 million.

“The sales office we built down there was as much for the buying public as it was for our bankers,” said Mr. Witkoff. “We wanted to say to them, 'Look, you lent us $230 million in the construction loan. Look at what we’re creating here.'”

M&T and Wells Fargo, along with PNC, are also in the final stages of negotiations to provide a $234 million loan for the former International Toy Center-turned-luxury condominium at 1107 Broadway in the Flatiron District, which the Witkoff Group purchased in 2011. The developer is in the process of expanding the 16-story building, rebranded 10 Madison Square West, adding six additional floors on top as well as a yoga studio, fitness center and 60-foot pool.

The drop-off in financing for such projects is a well-documented chapter in the economic downturn's impact on commercial real estate lending in New York City and elsewhere.

Between 2007 and 2012, there were virtually no construction loans from commercial banks for new condo developments as construction financing “effectively dried up,” said Jonathan Miller, president and chief executive of the real estate appraisal firm Miller Samuel Inc. As the lending market for condo construction in the city shows signs of improvement, nearly all of the latest developments in the works, including 150 Charles Street and 10 Madison Square West, are at the top 10 percent of the market, he said.

“There are a lot more condo developments in the pipeline over the next two years,” Mr. Miller said. “But the types of projects being lent on now are far different than what we saw during the last boom. I like to say 3,000 is the new 1,500, in terms of square footage. The majority of new condo developments in New York are all varying degrees of luxury pricing, which starts at around $3 million a unit. The reason for that, primarily, is because land prices and construction costs right now only make it feasible to go after the upper end of the market.”

This recent trend of luxury condos being in the works doesn’t mean that the banks only want to lend at the upper end of the market, Mr. Miller noted. “That’s just what they’re being presented with,” he said.

Peter D’Arcy, regional president for the New York metropolitan area at M&T Bank, acknowledged that financing for non-luxury condos is still hard to come by, though smaller banks and nonbank lenders are coming in to fill the void. “A greater number of banks are open to financing condo deals today,” Mr. D’Arcy, who played a key role in helping finance 150 Charles Street, told The Mortgage Observer. “The larger, more established banks are still sticking to the name-brand developers, but 2013 has seen smaller banks increase the overall money available to finance condos.”

Mr. Witkoff, who owns about 30 properties in the United States and London, once had a strong financing relationship with Lehman Brothers, among the other big lenders he works with today. But that relationship ended when the financial giant filed for bankruptcy in 2008. The connection with M&T and Wells Fargo proved to be longer-lasting.

“When you’re dealing with familiar faces, you know they’re going to be there at the closing table and if, God forbid, there’s a glitch along the way, you know you can talk to them,” said the developer, whose sociable nature is expressed without the aid of a computer. His office, in fact, doesn’t have one, and he uses a BlackBerry for business and personal calls and emails. An iPad he owns sits somewhere, unused.

Mr. Witkoff’s relationship with M&T goes back to the early 1990s, a few years after he and his partner at the time, Laurence Gluck, left their lawyer jobs at the former New York City firm Dreyer & Traub and dove headfirst into the real estate business. Back when the two took regular trips to Harlem and Washington Heights and Mr. Witkoff wore a licensed handgun on his ankle for protection, M&T helped finance some of their first residential purchases in upper Manhattan.

“In the early days of us operating, every time we went in for a loan, it was another ‘proctology’ report and interview on how we were going to do things,” Mr. Witkoff said with a laugh. “The president of M&T’s New York City division at the time was John Cook, and I remember walking into his office sometime around 1996, when we were buying 1 Broadway for $15 million.”

“Back then we didn’t have the kind of liquidity we have today, and that’s just the way it was,” Mr. Witkoff remembered. “Everything was a question, and at times that was frustrating—but it was fair.”

Mr. Cook, 71, still works at M&T as an executive vice president and chairman of the mortgage committee of the bank’s New York City advisory council, which approves its commercial mortgages for the metropolitan area, including the ongoing stream of deals from the Witkoff Group. The M&T veteran acknowledged that he took an almost paternal role with Mr. Witkoff in the first few years of his real estate career.

“I was always telling him in the early going, ‘You’re pretty leveraged here, you should pull something off the table on every deal and put some real liquidity away so that you can feed a building if it gets underwater,” Mr. Cook remembered. “Now when I see him, he says, ‘Hey John, my liquidity’s over $70 or $80 million.’ He can’t resist reminding me of that.

“When Steve and Larry split apart, Larry took most of the residential stuff, while Steve took most of the office stuff and later diversified into other forms of real estate, including residential construction and rehab.”

In 1999, after Mr. Witkoff had become well accustomed to “putting real liquidity away,” Mr. Wiener of Wells Fargo and the late Bernard Mendik, former chairman of the Real Estate Board of New York, asked him to join the executive committee of REBNY.

“I remember Bernie and Alan coming to me and saying, ‘You know you’re doing good things, and you’ve got to give back. We need young representation on the executive committee, so we’d like you to consider coming on board,’” said Mr. Witkoff. “These guys were icons to me, so my immediate response was, ‘If you’re asking, I’m honored and privileged. How could I say no?’

“A year or two later, I joked with Alan and told him, ‘Now I figured it out: you got me into this thing, but this was all about getting another checkbook to write charitable and political donations.’ Of course, I couldn’t say no to that either.”

When asked about that jovial conversation, which had taken place at point when New York’s real estate market was in one of its primes, Mr. Wiener laughed at the thought, but said his professional appreciation for Mr. Witkoff went beyond his liquidity.

“Steve is incredibly knowledgeable about the market, he knows when to pull back, and he doesn’t overpay for things,” said Mr. Wiener, group head of Wells Fargo Multifamily Capital. “Wells Fargo is attracted to doing business with both him and Scott Alper because they’re good at what they do and they’re very hands-on, yet they don’t try to do too much at the same time. There are a lot of people in the business that don’t know what they’re doing,”

In Miami, Mr. Witkoff mingles with a different group of lenders than his old pals in the tristate area. The Witkoff Group recently began construction on a Hilton Cabana hotel on the northern end of Miami Beach that it partnered on with Highgate Holdings and real estate private equity firm Rockpoint Group and financed through a $40 million loan from Ladder Capital.

Mr. Witkoff and his team also recently purchased the former Wyndham Garden Hotel in Miami’s South Beach with the Carlyle Group, financed through a $25 million loan from UBS, as well as a large office building in Downtown Miami with Highgate, financed through a $50 million loan from Deutsche Bank.

“The Miami financing market is much more inefficient than New York’s,” Mr. Witkoff noted. “There are significantly less lenders operating down there, even today. Three years ago there were way less, maybe two or three. Also, you can’t get the type of good pricing in Miami that you get here.

“There’s a perception that New York real estate is a lot more secure and that the market is more liquid and trades more easily, and it does. But the Miami marketplace is coming on pretty good, and I think when the banks do come in there and it does get more efficient, it’s only going to lead to further uptick in valuations.”

As the evening wound down and most of the New York office cleared out, Mr. Witkoff received a call from one of his business partners in Florida. He spent several minutes going over various project details to prepare before he flew out to Miami the following Monday. As with many of his day-to-day conversations, the business talk quickly turned to casual banter about golf, the weather and their respective families. The call carried on for about eight minutes, but Mr. Witkoff hadn’t lost his focus on the other conversation at hand when it wrapped up.

“It’s not that M&T and Wells Fargo refused anything I did down there; I just didn’t think to ask them,” he said after putting down his BlackBerry. “I didn’t get the feeling that that was something they had an appetite for. But I recently talked to Alan and Mike Kaczynski and the M&T guys, and each of them has said to me, ‘If you see things down there, we want to see them too.’”

Masashi Oka

New York-based PB Capital, a wholly owned subsidiary of Deutsche Bank, has over $3.7 billion in loans outstanding on properties in major metropolitan areas across the U.S., 35 percent of which are in New York City. Among them are loans on properties such as the office tower 300 Park Avenue, SL Green's 10 East 53rd Street and 100 Park Avenue, and 56 Leonard Street, which is currently under construction.

The acquisition of the first tranche of loans is expected to be closed by the end of April, according to sources. The entire acquisition is expected to be completed in the second quarter of 2013.

With this deal Union Bank will become the ninth-largest commercial real-estate lender in the U.S., according to an investor presentation for this transaction. PB Capital currently occupies the 19th and 20th floors of 230 Park Avenue. Union Bank is expected to sublease one of the two floors.

“This is an important strategic acquisition for Union Bank, as it leverages our established CRE capabilities by adding a national origination platform and strong relationships with top-tier property owners,” said in a statement Union Bank President and CEO Masashi Oka. “The transaction also enables the Bank of Tokyo-Mitsubishi UFJ to efficiently leverage its strength in the Americas and deploy capital into high-quality assets, through the strong capital position and U.S. dollar funding capabilities of Union Bank,” added Mr. Oka, who is also CEO for the Americas for Bank of Tokyo-Mitsubishi UFJ.

“The PB Capital team brings deep experience and strong relationships with marquee property owners that will provide tremendous expansion of our capabilities,” said Michael Stedman, senior executive vice president and head of Union Bank’s Real Estate Industries. “The ability to originate, underwrite and service institutional CRE loans on a national platform will drive additional business opportunities for Union Bank and BTMU in the U.S.”

In this deal, Marc Young and Chris Delson, partners at Morrison & Foerster were legal advisors to Union Bank. Paul Sowell, a managing director at Bank of America Merrill Lynch was financial advisor to Union Bank. Russell Leaf and Jeffrey Goldfarb, partners at Willkie Farr & Gallagher LLP were legal advisor to Deutsche Bank.

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A previous CMBS loan on the building had an outstanding balance of $215 million. Originated back in May of 2006, it was set to mature in June 2013, according to data from Trepp.

120 Broadway.

At least one other bank—Bank of America—bid on both a CMBS and a balance sheet loan for the building, which is owned by Silverstein Properties and joint venture partner UBS Realty Investors and is known as the Equitable Building. At 40 stories and 1.8 million square feet, the building was once the world’s largest office building.

Silverstein Properties has owned 120 Broadway since 1981. UBS Realty Investors acquired a partial interest in 2011 from CalSTRS, which sold a 65 percent stake. Current tenants there include the Alliance for Downtown NY, ALM Media, N.Y. Law Institute and New York Life Insurance Co.

This most recent CMBS loan has a term of seven years and was brokered by Eastdil Secured. None of the parties involved returned phone calls seeking comment.

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As previously reported, Deutsche Asset & Wealth Management’s real estate investment business and real estate investor David Werner acquired the leased fee interest from Rockpoint Group and hotel operator Highgate Hotels for $325 million. The sellers will continue to own and operate the hotel.

(Credit: Rockpoint Group)

Rockpoint Group and Highgate Hotels bought the Milford Plaza Hotel for $200 million in 2010, according to public records. They have upgraded the rooms and the common areas. Last month, The Wall Street Journal reported that that the two entities were planning to sell the property in three parts—the ground lease, the 1,300-room hotel and the property’s retail space—for an expected $650 million.

Located at 700 Eighth Avenue between 44th and 45th Streets in the heart of the Theater District, the hotel was built in 1928. At the time, according to the hotel's web site, it was the largest hotel in New York. With 1,300 rooms, it still remains among the largest Manhattan hotels today.

“We are pleased to add this high-quality investment to our client’s portfolio,” said Todd Henderson, Head of Real Estate, Americas at Deutsche Asset & Wealth Management, in a prepared statement. “Acquiring the leased fee interest in a prime New York City location is expected to provide strong and durable long-term returns.”

Meridian Capital Group Managing Director, Abe Hirsch and Managing Director and Head of Equity Capital Markets Peter Steier negotiated the financing along with representatives of Eastdil Secured.

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A rendering of the South Tower at Hudson Yards.

Last year, there was buzz that Bank of America was included in a group of lenders about to issue a $400 million construction loan for this first phase of the Hudson Yards project. A source at the bank confirmed that it had taken a look but that the loan never happened.

A Related spokesperson said that construction on the project’s Tower C had begun in early December 2012, but declined to comment on specifics, saying only that we “have our financial commitments for the tower in place.”

Tower C, also known as the South Tower, is going up at 10th Avenue and West 30th Street. It will be anchored by leather-goods company Coach and is slated to be 47 stories tall, with 1.7 million feet of office space. Occupancy is planned for the second quarter of 2015.

If the loan indeed closes, it will continue what has been a frenzy of lending activity by Starwood Property Trust. In October 2012, along with a fund controlled by Starwood Capital Group, the REIT completed its largest transaction to date—$475 million in acquisition and construction financing for the redevelopment of the Times Square Gateway Center at 701 Seventh Avenue.

It also recently closed a $86 million first mortgage to refinance the Charles development site at 1355 First Avenue, a previously stalled residential project on Manhattan’s Upper East Side.

Josh Barber, an analyst at St. Louis-based Stifel, Nicolaus & Company, told Mortgage Observer Weekly that Starwood steadily growing its balance sheet has afforded it these opportunities.

“There’s a very limited amount of people in the commercial real estate world today that can cut a $300 million, $400 million check,” Mr. Barber said. “Starwood, given that they have a $4 billion-plus balance sheet, is actually in the position of being able to do that. So frankly, I think it’s an advantage for them, and they’re actually just exploiting that. The larger loans are really where it’s tougher to find a lot of people who could do that, and Starwood is probably one of a very small handful of commercial real estate players that could do a big, large loan like that.”

The pending loan was first reported in this morning's Mortgage Observer Weekly. You can sign up here to receive this weekly newsletter.

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Greenwich Place.

Senior managing director Jon Mikula and managing director Jim Cadranell led the HFF team on the deal, which resulted in two fixed rate loans.

Greenwich Place, at 311 Putnam Green, will receive a $41 million loan and Greenwich Oaks, at 219 Weaver Street, a $55 million loan. The financing was through lender Allianz Real Estate of America. Neither property had debt when the deals were arranged.

Greenwich Place includes 266 one-, two- and three-bedroom apartments. It sits on 30 acres. Greenwich Oaks is on 29 acres and includes 130 two- and three-bedroom apartments. Both apartment communities were recently renovated.

cgaines@observer.com

Rendering of Times Square Gateway Center.

Last week,Starwood Property Trust and Starwood Capital Group announced the co-origination of a first mortgage and mezzanine financing for the acquisition and redevelopment of the 10-story retail building in Times Square. The building will be partially demolished to make way to the new complex.  Times Square Gateway Center will feature retail space, a hotel tower and the nation’s largest single LED screen for Broadway’s iconic lights and advertising.

Starwood Property Trust, Starwood Distressed Opportunity Fund IX, and Vornado have now funded $210.9 million, $70.3 million and $93.8 million, respectively. Other $100 million will be funded upon reaching certain milestones during the transformation of the property.

The lenders intend to sell the first mortgage in the near term to increase their investment returns and retain the mezzanine loan. Following the completion of the sale, the existing lenders expect that the mezzanine loan will generate an IRR in excess of 14 percent before attributing value to the equity participation received in the transaction which could be material.

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279 East 44th Street.

at 279 East 44th Street, at Second Avenue, in Turtle Bay. The commercial mortgage brokerage and advisory firm acted as an exclusive advisor to Steven Elghanayan, director of EPIC.

In 2007, Axa Equitable Life Insurance provided a $65 million loan on the property, according to public records. The new loan carries a seven-year, interest-only term. The name of the lender was not disclosed.

Built in 1964, the 21-story building offers residents and tenants a 24-hour doorman, laundry facilities, a 160-space underground car park and a recently upgraded lobby, mailroom, façade and doors.

The property has 10,000 square feet of retail space with 10 commercial units looking over Second Avenue.

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The financing will replace two land and bridge loans on the property, the Wyndham Garden Hotel. It was provided by Texas-based Hall Structured Finance, which earlier provided $21 million for the construction of a 137-key Holiday Inn Hotel—also in Long Island City. Mike Jaynes, president of Hall Structured Finance, told The Mortgage Observer that the company was paid off on that loan early in the year—making the Wyndham its second opportunity.

Wyndham Garden Hotel.

"We like the story of that area being a low cost alternative to staying in Manhattan—that tied in to the the proximity to the train to get in to Manhattan," Mr. Jaynes said. "And also the strength overall of the Long Island City Hotel Market."

Hall Structured Finance's loan is interest only, for a three-year term and at a floating interest rate.

“Due to the limited operating history of the property, our focus was on finding a lender who could understand the strength of the property and the market,” said Daniel Lisser, a Johnson Capital managing director who, along with Better Commercial Mortgage, jointly arranged the financing. “In the end, we ended up with a lender that understood the market and the intrinsic value of the property, even with the limited operating history.”

The seven-story hotel was developed by a Queens developer and opened in May 2012.

Steven Kassin, co-managing partner of Infinity Urban Century, confirmed the amount of the investment to The Commercial Observer.

Barry Sternlicht’s Starwood Property Trust and Starwood Capital Group provided $475 million in combined acquisition and construction financing for the development. The loan will have an initial funding of $375 million with $100 million of future funding for redevelopment costs and also contains an equity participation right for the lender.

Rendering of Times Square Gateway Center.

The joint venture between Maefield Development, Infinity Urban Century, the Witkoff Group and New Valley announced it will spend $170 million to develop the retail complex and another $200 million for the hotel tower.

The $800 million project is expected to be operational within two years and fully complete in three years.  An existing eleven-story office building at 701 Seventh Avenue will be partially demolished to make way to the complex. It will feature 130,000 square feet of retail space facing Times Square, a 500-room hotel tower and a 24,000 square-foot LED sign wrapping around its façade at 100 feet of height.

The roughly 500,000 people who --according to the Times Square Alliance-- go through Times Square every day will be exposed to the advertising on the huge LED sign. "Digital signs in Times Square can generate millions of dollars a year for landlords,"  Mr. Kassin said.

"Most buildings in Times Square are a recreation of old properties, that have limitations," Mr. Kassin added. “Our completed project will be the first building delivered in Times Square that is programmed and designed for the current massive consumption and flow of traffic.”

“The Times Square Gateway Center will greatly enhance the north end of Times Square”, said Ike Franco, co-managing partner of Infinity Urban Century. “This project has the potential to become one of the most innovative New York City developments in decades and to further cement the image of Times Square as the most vibrant global retail and entertainment district”.

"Our team worked side by side with the Witkoff Group and its partners to provide a flexible financing solution that enabled them to quickly move forward with the transaction," said Marcos Alvarado, senior vice president at Starwood Capital Group. "Times Square is an iconic destination and we are excited to facilitate a transaction that will allow the redevelopment of a marquee property in the area."

Wallace Schwartz and Douglas Heitner of the law firm Kasowitz, Benson, Torres & Friedman represented The Witkoff Group and  New Valley in the acquisition.

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78-02 Liberty Avenue.

The building was sold for $6.55 million and Israel Discount Bank of New York provided a $6.8 million loan on the property to finance its acquisition and renovation, Mr. Cayre confirmed.

“The building will to be converted to a state-of-the art, class A self storage facility,” Mr. Cayre said.  “We expect this project to be approximately $11 million when completed,” he added.

TI Storage currently owns and operates 10 properties in Brooklyn, Queens and throughout New Jersey. The company has two additional storage projects in the pipeline in the outer boroughs of New York, and is actively pursuing additional opportunities.

The U.S. Postal Service has put several properties across the country on the market, in order “to streamline operations,” a spokeswoman said. According to an online list created by CBRE, the brokerage in charge of selling the properties, 71 buildings and 24 land parcels of U.S. Postal Service are currently for sale across the country. A U.S. Postal Service spokeswoman confirmed that the list is up to date. Representatives of CBRE were not available for comments in time for publication.

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125 East 130th Street.

Preservation Development Partners is a joint venture of developers Donald Capoccia, Joseph Ferrara, Brandon Baron, Francine Kellman and Brian Raddock. It focuses on affordable housing properties and bought the 179-affordable-units at East River Apartments for $36 million. The building is located at 125 East 130th Street.

The acquisition of the building was financed with a $31.6 million loan consisting of tax-exempt-bonds issued by the New York City Housing Development Corp and credit enhanced by Freddie Mac through its Low Income Housing Tax Credit (LIHTC) Mod Rehab program. Wells Fargo was the servicer of the loan for Freddie Mac.

The apartment complex consists of five elevator-equipped buildings. The complex comprises 53 one-bedroom units, 47 two-bedroom units, 59 three-bedroom units, 17 four-bedroom units, two five-bedroom units and one superintendent unit. In the renovation windows, bathrooms, kitchens, floors and electric systems were updated.

East River Apartments benefits from a 20-year federal Project Based Section 8 Contract which will be renewed for an additional 20 years, ensuring the long-term affordability of its units for low income families.

“The Section 8 Contract will eliminate the risk of 179 affordable housing units in Manhattan from being converted to market rate units,” said Ms. Kellman. “With a limited supply of affordable housing in the New York area, and high demand for housing in general, this project will preserve affordable housing in East Harlem, and thus provide a long-term benefit to the community.”

Previously, Preservation Development Partners purchased the rental complex Surrey Carlton Apartments in upstate Spring Valley, N.Y. and Trinity Apartments, a 75-unit multifamily complex in the Bronx. It is currently negotiating the purchase of another affordable multifamily property in the West Side of Manhattan.

apirolo@observer.com

Manhattan Times Square Hotel.

Recently, Starwood Hotels & Resorts announced the sale of the Manhattan at Times Square Hotel to a partnership between affiliates of Rockpoint Group, Goldman Sachs’ Real Estate Principal Investment Area and Highgate Holdings.

According to public records, Starwood Hotels & Resorts sold 790 Seventh Avenue for $235.1 million. In a previous communication, Starwood Hotels & Resorts stated that it had sold the hotel for $275 million in cash.

“As we continue our transition to an asset-light model, we continue to look for opportunities to sell our owned hotels at attractive prices to best create value for our shareholders, and this sale of a non-strategic asset is consistent with that strategy,” stated Simon Turner, Starwood’s president of global development upon the closure of the deal.

Representatives of Wells Fargo, Rockpoint Group and Starwood Hotels & Resorts were not available for comments in time for publication.

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Northwestern Mutual Life Insurance Company originated the 13-year, fixed-rate loan, a spokeswoman with HFF confirmed. HFF represented the borrower on the deal.

3336 Wisconsin Avenue.

Construction has already started and the residences are scheduled to be ready by fall 2014. Upon completion, Cathedral Commons will include 137 luxury multi-housing rental units, eight luxury townhomes and 128,852 square feet of retail space. About 60 percent of the retail portion is pre-leased and will be anchored by a 56,000-square-foot Giant Food grocery store. The project is located at 3336 Wisconsin Avenue in the Cathedral Heights neighborhood of Washington, D.C.

“This is the successful culmination of a process that began by securing the Bozzuto Group as the development/joint venture partner for Giant of Maryland and then fully capitalizing the construction,” said HFF managing director Mark Remington, who worked on behalf of the borrower with director Daniel McIntyre. “Together, Giant of Maryland, Bozzuto and Northwestern Mutual will bring this trophy-class asset to life,” Mr. Remington added.

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The FHA-lender Red Mortgage Capital provided the loan, which bears an interest rate of 2.73 percent and is interest-only until 2014, when it converts to a 40-year fully amortizing loan freely pre-payable after 10 years. At closing, Aimco prepaid a $63 million loan secured by the property that required interest at 7.5 percent and that was due in the fourth quarter of 2013.

1077 Elkgrove Avenue.

Over the next two years, Aimco plans to redevelop 41 buildings, which total 631 now-vacant apartment units as well as common areas. In addition, the company will construct 13 new buildings--99 units--on currently vacant land, a 5,000-square-foot leasing center and a 6,100-square-foot fitness center and pool area.

Earlier this year Aimco completed the first phase of redevelopment for four buildings with 65 apartment homes.

“It is very gratifying that the Lincoln Place redevelopment is now underway,” said Terry Considine, chairman and CEO of Aimco. “It has taken many years to arrive here. More, it has taken the hard work of many, including officials of the City of Los Angeles, the HUD Los Angeles field office, and my Aimco teammates. I am delighted by our prospects.”

Built between 1949 and 1951, Lincoln Place was designed by a team led by Ralph Vaughn, an African-American architect interested in the Garden City Movement, popular in the United States in the 1930s. As a result, Lincoln Place is listed on the National Register of Historic Places, the California Register of Historic Places, and is a local Historic-Cultural Monument. Because of its historic significance, the project has been approved for historic tax credits, which Aimco intends to sell, raising $16 million.

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