Kennedy Wilson Supplies $96M Loan for Alexandria Office-to-Resi Conversion

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A joint venture between Community Three and Whitaker Investment Corporation has nabbed $96 million of construction financing for an office-to-multifamily conversion project in northern Virginia, Commercial Observer can first report. 

Kennedy Wilson provided the loan on the sponsorship’s planned TideLock development in Alexandria, Va., which will convert three existing office buildings into a waterfront mixed-use property with 169 apartment units, 65 condominiums and retail space. The three 1980s-built office buildings previously housed the headquarters of the American Physical Therapy Association before the company moved to Potomac Yard in Alexandria.

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“The area and location and waterfront really excited us about the deal,” Thomas Whitesell, head of Kennedy Wilson’s debt investment group, told CO. “I would say 90 percent of the office deals that we’ve looked at for converting to multifamily don’t work, but this one is one of those 5 to 10 percent that does work.”

Cushman & Wakefield’s Marshall Scallan, Michael Zelin, Bindi Shah and Nick Rangel arranged the construction loan. 

Ryan Whitaker, president of Whitaker Investment, noted that the TideLock project was originally envisioned  in 2019 before the post-COVID pandemic trend of office-to-residential conversions. He said the apartment an condos will provide a “rare opportunity for unobstructed Potomac River frontage” with views stretching from downtown Washington, D.C to National Harbor in Maryland.

Located at 1055 North Fairfax Street in Alexandria’s Old Town neighborhood, the TideLock development will feature 7,000 square feet of commercial space that Whitesell said will likely include a community art gallery in addition to retail options. Community amenities will include a fitness center, rooftop decks, an outdoor lounge and grilling areas, and a private courtyard. The project is slated for completion in 2026. 

Whitesell, who previously originated a construction loan for another Alexandria office-to-multifamily development at 200 Stovall Street, said the TideLock project provides flexibility given that the three brick office buildings are only four stories, and plans call for the development to scale by another five floors. 

“This property converts extremely well because of the layout and the shape of the buildings,”  Whitesell said. “It lays out however they want to build above it, so that combination made me feel really comfortable about this deal.” 

Officials at Community Three and Whitaker Investment Corporation did not immediately return requests for comment. 

Andrew Coen can be reached at acoen@commercialobserver.com