Happy Ending For Prime Site Downtown

By Dana Hedgpeth

Developers for one of the city's most prominent downtown sites said yesterday that they closed a $194 million construction loan to build an office building at the corner of K Street and Connecticut Avenue NW.

The loan was provided by a consortium of six banks, led by Chevy Chase Bank. Brokers at Cassidy & Pinkard said they'd been trying to find lenders for the office building, which has the law firm of Arent Fox as a lead tenant, but in this credit crunch it was harder and took longer than usual.

"It is a very challenging market," said Philip Mudd, a managing director at Cassidy & Pinkard, a local real estate firm. "Even when you have a first rate location, a first rate sponsorship and a first rate tenant it was still challenging. One time you would have done a deal like this with one or two lenders but in today's environment you have to break it down into a club. Big deals are hard to get done."

The developers demolished two office buildings at the intersection's northwest corner this year after winning D.C. approval to replace them with a 12-story office complex designed by the architecture firm founded by I.M. Pei. But in September, the developers -- which include Bernard Gewirz, Albert Small and Edward Kaplan -- asked the District for permission to turn the site into an aboveground parking lot, at least temporarily, citing the economic downturn.

Mudd, who helped close the deal, said construction is now expected to begin in a year.

By Dan Beyers  |  November 13, 2008; 4:54 PM ET
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