Columbia Pacific, Nuveen Green Capital Lend $48M on Seattle Area Townhomes Project
By Andrew Coen August 7, 2024 11:52 am
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VP Companies has sealed a $48 million financing package for the recapitalization of a planned townhome project that’s part of a master plan development in suburban Seattle, Commercial Observer has learned.
Columbia Pacific Advisors provided a $28 million senior loan on VP Companies’ planned River Run Townhomes development in Woodinville, Wash., refinancing a previous construction loan it originated in 2021. Nuveen Green Capital also supplied a $20 million Commercial Property Assessed Clean Energy (C-PACE) loan to fund building costs, seismic mitigation systems that help the borrower reduce its cost of capital.
“We partnered with Nuveen [Green Capital] to refinance the deal and give them more runway to execute on what was already a very successful project,” Will Nelson, director of real estate lending at Columbia Pacific, told CO. “It will help the borrower move the project forward.”
The 31-unit River Run Townhomes development is slated for completion in the next 12 to 18 months as part of an overall 19.1-acre development from VP that will also feature a winery with restaurants, hotel and apartments. Nelson said the entire master-planned development has been in the works for the past two decades and will be an economic boost to the Puget Sound area of Washington when it opens.
Aidan McLaughlin, director of originations at Nuveen Green Capital’s Portland, Ore., office, said the transaction was attractive from a lending perspective due to the high demand for townhome style homes in the Seattle area coupled with momentum from VP’s master-planned community development.
“The housing market around Seattle is still really strong and still really supply constrained,” McLaughlin said. “In terms of our basis we’re probably at a little under 30 percent loan to value so it’s a really attractive basis for pretty much irreplaceable real estate.”
Officials at VP Companies did not immediately return a request for comment.
Columbia Pacific Advisors and Nuveen Green Capital also teamed up to supply $89 million of construction financing in February for the retail winery portion of VP Companies’ master-planned project called The Yard. The transaction featured a $47 million senior construction loan from Columbia and $42 million of C-PACE debt from Nuveen Green Capital.
McLaughlin said the townhome component of the project made C-PACE debt advantageous for VP Companies because of how much more expensive these assets are to build.
“In that space a lot more private capital is involved which just naturally tends to be more expensive and C-PACE is a much cheaper alternative on those types of projects especially right now as banks are really limiting how much they’re going to lend on new construction in the Puget Sound area,” McLaughlin said. “A lot of people don’t really think of C-PACE when they think of townhomes and we’re looking to change that notion since it’s actually a really, really effective form of financing for that.”
David Hutchinson, president and founder of VP Companies, said in a statement that the “C-PACE program was ideal for the project.”
Andrew Coen can be reached at acoen@commercialobserver.com.
