FleetBoston Financial and Dresdner Bank Real Estate are in the market with a $255 million construction loan for the development project backed by three companies, according to Real Estate Finance & Investment.Lend Lease Real Estate Investments, Westbank Projects and Starwood Hotels have tapped the three banks for a fully underwritten deal for a 1.4 million-square-foot mixed-use development in Bellevue, Wash., bankers said. Lead banks Fleet and Dresdner are seeking eight to 10 banks to round out the syndicate. The banks held a meeting at the construction site last week. Bankers at Dresdner, Fleet, WestBank and Starwood officials did not return calls, while Lend Lease officials declined to comment.
Pricing on the three-year loan will be between LIBOR plus 2% and 3%, bankers said. Although construction loans are typically executed at LIBOR plus 21 2%, this deal required higher pricing due to the risks involved and there was some question last week on whether it was inching up.
The development includes hotel, theatre and condominium space, sectors that are relatively out of favor in the market. Moreover, it is in a technology-heavy market and tenants will likely be from the dot-com world, one banker said. The loan, which is secured by the underlying property, includes a one-year extension period. The construction loan is fully underwritten and syndication is expected to close at the end of the month.