Dealmaker: Capital One Closes $80M Construction Loan

Capital One served as sole lead arranger, sole bookrunner and administrative agent for an $80 million syndicated loan that financed construction of a 297-room hotel near the University of Maryland-College Park. 

Sadhvi Subramanian, senior vice president and market manager in Capital One Commercial Real Estate’s Washington, D.C. office, originated the transaction with Senior Vice President Brian Gormley. The borrower, Southern Management Corp., Vienna, Va., is the largest privately owned residential property management company in the Mid-Atlantic region. 

When completed, the 10-story, 366,000-square-foot hotel on the site of a former car dealership will include 44,000 square feet of meeting space, an indoor/outdoor pool and a fitness center. The property will also include 43,000 square feet of ground-floor retail space upon delivery in 2017.

The three-year interest-only loan includes the possibility of two one-year extensions. Other terms were not disclosed. 

In August, Capital One provided $35.1 million for The Martin, a six-story apartment community currently under construction in San Francisco’s Dogpatch neighborhood. Kristen Croxton and Greg Reed, senior vice presidents in Capital One’s Newport Beach, Calif. office, originated the loan on behalf of Raintree Partners, Laguna Niguel, Calif. 

This represent the first construction loan originated by Capital One’s Newport Beach office, Croxton noted. 

Reed said the Dogpatch neighborhood in San Francisco’s South of Market District is rapidly gentrifying, with many former industrial sites converting into restaurants, retail shops and offices. The Mariposa light rail stop adjacent to the property provides immediate access to the rest of the metropolitan area. 

The three-year loan includes three years of interest-only payments and the possibility of two one-year extensions.