Tamares Group, Atlantic Realty Secure Loan Extension for DC-Area Office Complex
Tamares Group and Atlantic Realty Companies have secured a three-year extension for the $97 million loan package on two of their Plaza Americas office buildings in Reston, Va., Commercial Observer can first report.
The $97 million financing — which covers Towers 3 and 4 of the Plaza Americas office complex — comprises a $83 million senior commercial mortgage-backed securities (CMBS) loan and a $14 million mezzanine loan.
Iron Hound Management’s Chris Herron, Kevin Thompson and Anthony D’Amelio secured a 36-month extension of both the senior and mezzanine debt, the latter of which was provided by AEW Capital Management and is held outside of the CMBS trust.
Plaza Americas Towers 3 and 4, at 11720 and 11730 Plaza Americas Drive, serve as collateral in the GSMS 2013-GC13 CMBS deal. They comprise 468,662 square feet of the 925,000-square-foot, four-building office complex, and rise 13 stories and seven stories, respectively.
The office complex sits in the heart of the Dulles Corridor, roughly seven miles from Dulles International Airport and 20 miles from Downtown Washington D.C. Property amenities include a Metrorail shuttle, a fitness center, five restaurants and landscaped outdoor space.
The property’s CMBS loan was transferred to special servicing on May 3 ahead of its maturity date of July 6, according to CRED iQ data, and the loan extension was secured late last month.
Sponsorship has owned the property for decades now, after buying the land — then forest land — in the late ’80s, securing entitlements and building the four office towers plus an adjacent retail shopping center. Construction of the office towers were completed around 2001.
Tamares Group, a Europe-headquartered family office, “has old-world business values and we commit to assets,” Itrat Sayeed, a managing director at Tamares, told CO. “We’re not an institution that trades in and out of assets. We are long-term holders, and we add value to them throughout the years.”
That investment approach is, in part, why an extension was granted, Sayeed said.
“The lending environment is such that if you’re committed to an asset, and a lender is willing to work with you, you have to demonstrate that there’s value in the asset,” he said. “You also have to demonstrate that you’re willing to put in the effort and the capital that’s required to lease up and reposition assets — we did that, and that’s how this extension came together.”
One of the towers’ major tenants, Science Applications International Corporation, has a lease expiring in 2025, and a potential lease expiration presented a challenge for new lenders to underwrite in today’s already challenged market environment.
“In today’s environment, the timing of the lease rollover at the asset made it challenging to refinance,” Sayeed said. “The loan extension secured the necessary capital and time to address this tenant rollover and allow the capital markets to recover.”
The Plaza Americas office complex has a long track record of high occupancy behind it, in part due to its prime location.
“It is next to a great retail amenity, and we’re located on the Dulles toll road, between D.C. and the Dulles airport,” Sayeed said. “We look at this period as a temporary hiccup in history in the leasing market, and we think that with the right repositioning, the leasing will come back. So, our goal is to re-lease this asset.”
The restructuring involved a significant new capital investment that would be available to the borrower for the aforementioned leasing costs for the bridge period.
Renovations, being led by Gensler, are expected to be completed in mid-2024, and include a new lobby, conference center and tenant lounge in Tower 3. Tower 4’s upgrades will include a “Town Hall” concept. Towers 1 and 2, which aren’t part of the loan collateral, will undergo minor renovations.
The extension marks sponsorship’s first time working with the Iron Hound team.
“We were referred to them by our loan brokers who helped originate these loans and also many loans in the past,” Sayeed said. “When we went out to them looking for a new loan on the property, they referred us to Iron Hound instead, and now they’re friends. We’re very happy with this execution.”
“The closing of this modification represents a joint effort by all parties involved to ensure that the property has the necessary capital and time to attract and retain tenants in a performing office market situated between Reston Town Center and Reston Station,” Iron Hound’s Herron said.
Cathy Cunningham can be reached at firstname.lastname@example.org.