A vacant office building in  Old Town   Alexandria  is set to return to its roots. Developers May Riegler Properties and Potomac Investment Properties  have landed $59.2M in financing from Twain Financial Partners  to turn the building at 699 Prince St., which was built as the Hotel George Mason in the 1920s, back into a hotel. The project costs $76.5M in total, according to a release from Twain. The development team has been working with the city to secure the gap financing it needs to restart the 90K SF adaptive reuse project. Developers had begun demolishing the building's interior in 2020 when the pandemic's gut punch to the hospitality sector brought the project to a halt. But the  Alexandria Economic Development Partnership  threw its support behind the project, noting the city has lost 17% of its hotel base since the pandemic began. The AEDP requested roughly $6M in gap financing from the city on behalf of the developers, saying the hotel would ensure Old Town could serve tourists looking for upscale lodging and additional meeting space, according to a January  filing with the city. The hotel conversion project would receive a small portion of city and state tax revenue from the AEDP through an agreement with the city. Once completed, the newly envisioned Hotel Heron is expected to have 134 rooms and 30K SF of amenity space, including ground-floor retail. It will also feature large meeting space that AEDP hopes will draw business travel back from The Wharf ,  National Harbor and other destinations. The development partners plan to complete construction in November 2023. Contact Jacob Wallace at jacob.wallace@bisnow.com

Hotel-Turned-Office In Old Town Lands Financing To Be Turned Back Into A Hotel

When developers set out to secure construction financing , their first move will likely be to call commercial banks or mortgage banking companies. Few would think to turn  toward a ground lease  — a structure where a property owner sells the land underneath an existing building or a planned development project to a ground lease purchaser who leases it back to them, traditionally for 99 years. While this scenario may work for some, the long, restrictive nature of a ground lease has left a bad taste in many developers’ mouths. According to one finance firm, however, it may be time for developers to rethink what “ground lease” means. “A lot of people have a preconceived notion about ground leases, and they don’t realize that so much has changed,” said Will Purdy, director of real estate at Twain Financial Partners . Purdy said that with a traditional ground lease there is typically a very limited or no repurchase option. This means the sponsor, developer or property owner is effectively giving up ownership of the land although they will maintain ownership of the improvements made to their properties. But Twain does not offer a typical ground lease, Purdy said. Instead, the company’s ground lease product operates as a bridge loan, with repurchase options kicking in as soon as year three or four, at a fixed, predetermined price. Twain’s purchase price for the land is typically 35% of the as-stabilized value and the product also allows for the capitalization of up to 36 months of rent payments. This gives developers time to stabilize and generate cash flow. “Compared to traditional ground leases, our offering is a totally different model,” Purdy said. “This is a new, flexible type of construction financing with all the short-term benefits of ground lease financing without the long-term commitment.”
Traditionally, developers who have been interested in ground leases were drawn to their ability to help them increase total leverage on their projects, resulting in smaller equity requirements and increased returns. These leases are also very efficient forms of capital that act as interest-only debt. Twain's ground leases still offer all of these benefits, Purdy said, but with even greater flexibility thanks to the short-term repurchase options. Twain offers financing for all asset types, from multifamily, retail, office and hospitality to senior housing,  industrial and self-storage. Recent ground lease closings include $90M in financing for an apartment project in Cleveland, $50M in financing for a hotel project in Alexandria, Virginia, and $135M in financing for a renewable diesel facility in Reno, Nevada, Twain’s largest ground lease investment to date. Purdy said that while most people associate ground leases with major coastal cities like New York, Boston and Los Angeles where land prices are very high, Twain is active in all 50 states in primary, secondary and tertiary markets. The minimum investment required is $5M and there is no maximum. Twain primarily finances construction projects, but Purdy said his team has also financed acquisitions and recapitalizations, including several distressed assets. Purdy said one of the main things he wants developers to realize about what sets a Twain ground lease apart is the flexibility it can provide. No one has to give up their land forever or worry about potentially getting stuck with a massive rent payment in year 68 of their 99-year lease. Instead, they know they will have the opportunity to repurchase the land in just a few years. He said the majority of developers he speaks with are unaware this type of product even exists, or that they can use ground leases to finance their projects. Twain is hoping to change that. “We want people to know that we’re here, and we don’t come with the type of headaches ground leases often bring,” Purdy said. “We’re flexible, we’re unique and we’re willing to take on construction risk.” 
This article was produced in collaboration between Studio B and Twain Financial Partners . Bisnow news staff was not involved in the production of this content. Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com . Contact Julia Troy at julia.troy@bisnow.com

From Fixed To Flexible: How One Company Is Ushering In A New Era For Ground Leases

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ALEXANDRIA, Va., April 26, 2022 /PRNewswire/ -- A nearly century-old hotel building in Alexandria's premier Old Town neighborhood soon will be bustling with activity again. Hotel Heron, an approximately 90,000-square-foot urban adaptive-reuse development, is set to begin construction in June 2022 now that financing has closed on the $76.5 million project. Of that total, $59.2 million is being made available by Twain Financial Partners through a mixture of sale leaseback financing and both federal and state historic tax credit equity. "This project is a great example of Twain bringing a near complete capital stack solution to one project," said Kelly Iffrig, project manager and senior counsel at Twain. "Between the leaseback and the tax credits, we are able to provide the development team with the funding they need to get this hotel from concept to completion." The Hotel Heron project will restore the original George Mason Hotel building, which was constructed in 1925. The facility will contain 134 rooms and 30,000 square feet of amenity, meeting space, restaurant space, and ground-floor retail one block away from the "main and main" intersection of King and S. Washington streets. The property currently is used as an office building and parking garage. Financing closed earlier this month, and the project has an anticipated completion date in November 2023. The development team includes May Riegler Properties and Potomac Investment Properties. The hotel and restaurant will be managed by Aparium Hotel Group. ABOUT TWAIN FINANCIAL PARTNERS
Twain Financial Partners is a full-service specialty finance firm with $4 billion in assets under management providing a full range of capital needs to real estate and renewable energy developments throughout the United States. Founded in 2013, the firm is based in St Louis, Missouri, and maintains offices across the country. https://twainfinancial.com/  
SOURCE Twain Financial Partners

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Historic Hotel Brought Back to Life With $59 Million From Twain Financial

Historic Hotel Brought Back to Life With $59 Million From Twain Financial

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HOUSTON, April 19, 2022 /PRNewswire/ -- Old Texas rice fields soon will be harvesting something new as a $145 million clean energy project nears completion thanks to a sizable final investment. Twain Financial Partners has closed on $42 million in financing to complete the Longbow Solar project, a massive ground-mounted solar photovoltaic (PV) energy system in Brazoria County, Texas, just southwest of Houston. Twain's $42 million commitment, its largest solar loan to date, is part of its recent commitment to finance $1 billion worth of new renewable projects over the next three years. "Renewable energy investment is a fast-growing segment of our business, and the Longbow project helps highlight our capabilities in that space," said Michael Park, who recently joined Twain as its Director of Renewable Energy. "I fully anticipate Twain will announce funding commitments for a number of similar projects in the coming months." The Longbow Solar project is being co-developed by Clean Capital Partners and Aspen Creek. The project, which is on schedule to be placed into service by August 2022, will be a big win for Brazoria County residents and businesses. A power purchase agreement will allow for the sale of most of the generated power to a distributing company at a price that is less than one-third of the current market rates for Texas residential electricity customers. ABOUT TWAIN FINANCIAL PARTNERS
Twain Financial Partners is a full-service specialty finance firm with $4 billion in assets under management providing a full range of capital needs to real estate and renewable energy developments throughout the United States. Founded in 2013, the firm is based in St Louis, Missouri, and maintains offices across the country. https://twainfinancial.com/
SOURCE Twain Financial Partners

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Twain Provides $42 Million to Convert Texas Rice Farms to Solar Farms

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