Dealmaker: Berkadia Secures $54M in Construction Financing

Berkadia, New York, secured $54.1 million in construction financing for retail and multifamily assets in Ohio and Virginia.

In Strongsville, Ohio, Berkadia Director Dan Geuther of the firm’s Cleveland office secured $19 million in construction financing through CIBC Bank for retail development Royalton Collection. The deal closed on March 22.

The to-be-built property at 17800 Royalton Road will include 74,000 square feet anchored by HomeGoods with Panera Bread and Outback Steakhouse outparcels. The loan’s sponsor was Somera Road, New York. The three-year interest-only loan represented 73 percent of cost and closed with 50 percent of the retail space pre-leased.

Geuther said Somera acquired a vacant office building and successfully rezoning the land to permit retail development, “thereby adding significant value to the site,” he said. “This creative entry to the transaction, combined with significant pre-leasing from a high-quality tenant roster, should enable Somera to generate superior returns for its investors.”

Berkadia also financed Magnolia Green Apartments, a garden-style multifamily property to be built in Moseley, Va. Senior Managing Director David Blake and Director Amy Gay of the firm’s Richmond, Va. office originated the $35.1 million construction loan through Berkadia’s HUD program. The borrower was a single-asset entity between Schell Brothers, Rehoboth Beach, Del., and iStar, New York.

The 4.15 percent fixed-rate HUD 221(d)(4) construction-perm loan included a 40-year amortization schedule.

“These apartments are the first multifamily offerings in the master-planned community,” Gay said. “This multifamily community will also have the distinction of being developed further west in Chesterfield County than any other apartment deal to date.” She called Magnolia Green an example of a thriving “new urbanism” community in Chesterfield County.