Mosaic Real Estate Investors Funds $460 MM Construction Loan on Portland, OR Development
By: Mosaic Real Estate Investors
The 35-story Block 216, which will encompass a full city block in the heart of downtown Portland's Central Business District, incorporates a mix of uses including 160,000 square feet of Class A office space, a 251-key Ritz Carlton Hotel (the first five-star hotel in Portland), 138 Ritz Carlton-branded residences and 7,800 square feet of ground level retail which will open up to a pedestrian "festival street."
With financing in place, Portland-based BPM, led by its founder Walter Bowen, will formally break ground this summer. Construction is expected to be completed in 2023.
"The high-leverage loan request, in and of itself, made this a very complex financing," said Alex Ovalle, Managing Director and Head of Origination for Mosaic. "It was made even more complicated given that it is also the first development of its kind in Portland to offer this mix of uses. However, we were able to approach and understand the valuation of each of the separate components. Combined with the strength of sponsorship, it created a situation that was perfect for us. As a result, we were able to fund the four-year construction loan within 30 days of executing the term sheet."
The financing opportunity, which went to market in late February, was well received with interest from banks, debt funds and foreign sources of capital, according to Malcolm Davies, Principal and Managing Director of George Smith Partners who arranged the financing along with George Smith Partners Senior Vice President Zachary Streit.
"We recognized that due to the size and complexity of this project, we were going to focus on groups that would have the ability to finance a project of this scale" said Davies. "We cast our net to a variety of capital providers that included Construction, Mezzanine and 'Stretch' (senior and mezzanine combined) lenders. Mosaic not only understood the opportunity, but they did an incredible job demonstrating their similar vision and philosophy with the sponsor, BPM."
The construction team incudes Howard S. Wright, general contractor; BPM Real Estate Group, developer; GBD Architects (core + shell) and HKS (interiors), architects; and PLACE, landscape architect.
Since the beginning of the year, Mosaic has originated approximately $800 million in construction financing on hospitality and resort projects throughout the United States. Most recently, Mosaic provided Santa Monica, CA-based developer Columbus Pacific with $165 million in senior construction debt for the development of a 233-key luxury condo hotel in Park City, UT.
About Mosaic Real Estate Credit and Mosaic Real Estate Investors
Mosaic Real Estate Investors (http://www.mosaicrei.com) and its debt platform, Mosaic Real Estate Credit was founded by industry veterans Ethan Penner and Vicky Schiff. Mosaic is focused on addressing unmet needs by providing creative bridge and construction debt capital to borrowers aiming to add value to their assets through development, redevelopment and repositioning. Mosaic's investments include first mortgage loans, as well as mezzanine or preferred equity structures. Mosaic has originated over $1.5B in transaction volume to date.
About George Smith Partners
Founded in 1982, George Smith Partners is a leading national provider of capital market advisory services to the commercial real estate industry. The firm specializes in arranging financing for commercial and multifamily properties, including acquisition, construction, bridge and permanent loans, as well as mezzanine loans, highly leveraged participating loans and joint venture equity. The company has arranged more than $55 billion in financing since its inception. Additional information about George Smith Partners is available at www.GSPartners.com.
About BPM Real Estate Group
BPM Real Estate Group ("BPM") was founded by Walter C. Bowen in 1980. Active across multiple sectors and markets, the BPM can enhance the value of its properties with superior design, intelligent development, superior customer focused property management and efficient partnerships. Dedicated to enriching lives and inspired built environments, BPM represents an unwavering commitment to quality in all aspects of a project. From concept to completion, its holistic approach unlocks value for both tenants and Owners.
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