DC’s The Wharf Obtains Record $847M Financing for Project’s Next Phase


Goldman Sachs (GS) has led a record-setting $847 million financing to fund the construction of the second phase of The Wharf, the popular $2.5 billion, 3.2-million-square-foot waterfront mega-project in Washington, D.C., according to co-developer Hoffman & Associates.

The financing represents the largest private construction loan in D.C. ever, the borrower said. Goldman Sachs headed the non-recourse deal, along with syndicate members Starwood (STWD) Capital Group, Mack Real Estate Group and Pentagon Federal Credit Union

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“We put a solicitation out almost a year ago and worked with several of the lead lenders in the area and whittled it down to about three earlier this year, and took it down to Goldman Sachs,” Monty Hoffman, Hoffman & Associates’ CEO and founder, told Commercial Observer. “They provided a very competitive non-recourse loan and the amount was very strong in loan to cost, so there were a lot of compelling parts, which is why we chose them.” 

The borrower group, Hoffman-Madison Waterfront (HMW), includes Madison Marquette, while Public Sector Pension Investment Board is also a joint-venture partner on the waterfront project. Eastdil Secured brokered the debt. 

The loan follows HMW’s $800 million refinancing of Phase one with a Wells Fargo (WFC)-led syndicate, which CO reported in June.

“Phase one is completed and very successful, and this is a continuation of The Wharf development, which will be a mixed-use community with lots of vibrancy along the waterfront,” Hoffman said. “Phase two will have more restaurants and another hotel, luxury condos, high-end apartments, trophy office and new marina on the east side, so there’s a lot for people to enjoy.”

Construction on the second phase of The Wharf began in March, and Hoffman said that law firm Williams & Connolly LLP is already signed on as an anchor tenant, with a 300,000-square-foot, 15-year lease at two mixed-use office towers located at 690 Maine Ave. SW. Phase two is expected to be completed by 2022.