Starwood provides $175m loan on Virginia offices

The real estate investment trust lent on a Booz Allen Hamilton-anchored portfolio.

Starwood Property Trust has provided a $175 million acquisition financing to the Meridian Group on the four-building office portfolio in Fairfax County, Virginia, the broker HFF said on Friday.

The Connecticut-based real estate investment trust provided the five-year, floating-rate loan to Meridian in order to purchase the Tysons Metro Center portfolio for $227 million, according to a statement. That total brings the financing’s loan-to-value to 77 percent.

Meridian, a real estate investment and development company focused on the Washington DC area, purchased the portfolio from an affiliate of Beacon Capital Partners, another real estate investment trust based in Boston.

In addition to the acquisition loan, the company used funds from its Meridian Realty Partners II fund to complete the transaction, according to a press release. 

The Tysons Metro Center portfolio is currently 91 percent-leased, including the tenants Booz Allen Hamilton and Alarm.com, according to HFF. The Class A office properties total 763,965 square feet and are located at 8251-8285 Greensboro Drive in Tysons, Virginia.

The seller had purchased the four buildings in February 2007 as part of a larger $6.5 billion deal, which included nine properties in the Northern Virginia suburbs, seven properties in the nearby Washington, DC area, and 20 properties in Seattle, Washington, a source familiar with the matter confirmed.

Overall office leasing activity in the Tysons area had reached 1 million square feet over the first three quarters of last year, making it the Northern Virginia submarket with the highest share (25 percent) of office leasing in the area, according to a Cushman & Wakefield report from November. 

Tysons’s area office stock showed an average asking rent of $31.93 per square foot at last September, the report also shows. At that time, the local office vacancy rate was 20.7 percent, slightly up from 19.1 percent at the beginning of the year.

Starwood Property Trust originates first mortgage, bridge, and mezzanine loans in US and Europe. The trust’s lending platform had $6.8 billion in total assets on its balance sheet as of 31 December 2016, its quarterly earnings release shows.