KKR Provides Bridge Loan for Luxury Apartment Complex Near Amazon HQ2
Investment giant KKR (KKR) has provided a $141.79 million bridge loan to Erkiletian Development Company to recapitalize The Sur, a recently finished, 360-unit, luxury apartment community in the National Landing submarket of Arlington, Va., near Washington, D.C.
Phillips Realty Capital facilitated the deal on behalf of the owner.
“Erkiletian is delivering an exceptional community located within one of the most active and vibrant neighborhoods in the DMV,” Adam Bieber, Phillips Realty Capital’s managing director, who structured the deal, said. “KKR sees the value of the asset as well as the added value Erkiletian brings to the table. This new capital influx will help with additional lease-up for what is bound to be one of the most desirable, new addresses in the region.”
The loan was arranged as a three-year, non-recourse, interest-only bridge loan with extension options. The proceeds from the new financing will be used to recapitalize the construction capital stack, with reserves funding additional lease-up costs.
“Capital markets have been inconsistent and choppy,” Bieber said. “The strong sponsorship, exceptional quality of the real estate, and continued strength of the Greater D.C. market resulted in any extremely competitive bidding war for this project.”
Located at 3400 Potomac Avenue on 1.67 acres, the 12-story community features modern unit interiors and amenities, as well as lots of outdoor space. It offers 16,503 square feet of retail space, too, and boasts views of the Potomac River and downtown D.C.
The community is approximately one mile from Amazon (AMZN)’s HQ2 and Virginia Tech’s Innovation Campus.
Phillips Realty Capital’s Malcolm Shaw and Bill Wrench joined Bieber on the deal.