Historic properties have become an increasingly attractive opportunity for lenders and debt brokers alike as of late.
In the latest such deal, HSBC Bank provided a $55 million first mortgage to Boston-based Synergy Investments to finance an Art Deco office and retail building at 185 Dartmouth Street in Boston’s Back Bay neighborhood, Mortgage Observer has learned.
HFF arranged the long-term, fixed-rate loan, which closed on March 9, a spokesperson for the brokerage said.
The funds are being used to pay off existing debt, provide the necessary funds to complete a capital improvement plan on the 11-story property and return equity to the borrower upon stabilization. The deal follows a recent construction loan brokered by HFF for the redevelopment of a 1939 Miami Beach hotel and other similar transactions.
The 164,559-square-foot property at 185 Dartmouth Street, which was built in 1937, recently underwent extensive renovations to modernize the property, “while retaining its classic Art-Deco appeal,” according to HFF.
The building contains 45 on-site parking spaces, eight floors of boutique office space, ground-level retail space, and a two-floor fitness center. Tenants in the building include Denham Capital, Boston Athletic Association, Starbucks, Freshii and FedEx Kinkos.
The Class-A office and retail structure, located on nearly half an acre at the corner of Stuart and Dartmouth Streets, sits next to the iconic John Hancock Tower and across the street from the neighborhood’s Back Bay Station.
HFF Managing Director Greg LaBine and Real Estate Analyst Patrick McAneny led the debt placement team on behalf of the borrower.
“HSBC Bank provided a flexible financing alternative for this transaction, with pricing reductions over time as the project achieves various milestones on its way to stabilization,” Mr. LaBine said. “Synergy’s track record of success, the high quality rehabilitation of the property that Synergy has recently completed and the tremendous location of the asset made this an attractive opportunity for HSBC.”
An HSBC spokesperson declined to comment. A representative for Synergy Investments did not return a request for comment.