CBRE Debt/Equity Team Secures $45M For Grossman Project

SHREWSBURY — One of Route 9’s iconic retail landmarks was demolished this spring, and now Grossman Development Group’s ambitious 375,000-sf mixed-use replacement of the Spags discount emporium is moving forward thanks to a $45 million infusion of equity and construction funding for 100,000 sf of fully leased retail space anchored by Whole Foods. CBRE/NE arranged the package which featured AEW Capital Management on the equity piece and Northwestern Mutual Life Co. providing $29.4 million in debt to construct Lakeway Commons.

“This joint venture is an ideal partnership combining local retail development expertise with exceptional institutional partners,” CBRE/NE principal Kyle Juszczyszyn relays in a statement announcing the pact. Juszczyszyn says solid sponsorship and leveraging an “extensive” CBRE platform provided Southborough-based GDG and founder Howard Grossman “a targeted list of both institutional joint venture partners and lenders” from which the AEW and Northwestern delivered the best proposal. “We are happy to have had the ability to work with GDG and are honored to have played a role helping achieve their vision on Lakeway Commons,” offers Juszczyszyn, the CBRE/NE team on the case including Christopher Coutts and Lenny Pierce. AEW Capital Management funded the venture on behalf of a separate accounts client.

Howard Grossman offered salutations for the results delivering “such prestigious partners” that paves the way for the experienced retail to develop “an exciting, community friendly mixed-use destination =that all will be proud of.” The infill site had been coveted by many groups but GDG ultimately took control of the parcel. The effort required a complex permitting process and had to endure an abutter lawsuit finally dismissed earlier this year, with Grossman and crew in the meantime signing up a solid roster of tenants for the retail component.

The financing in Shrewsbury helped cap a busy first half of 2016 for CBRE/NE’s Debt & Structured FInance team that also includes John Kelly, Michael Prakken and Sam Dylag who began the second quarter nailing down $84.3 million in preferred equity and a construction loan on Serenity, a 195-unit luxury apartment high-rise in the Longwood Medical Area being developed by hometown firm Longwood Group. “It was a pleasure to work with the developers on this ground-up construction financing opportunity,” Kelly recounted in a press release after than springtime closing. Terms of the agreement were not provided, but Kelly offers that “this structure matched Longwood Group’s long-term business plan.”

CBRE/NE’s multi-faceted debt and equity capabilities were among the reasons Longwood Group member Anthony Nader said the firm was “very pleased with the financing terms CBRE produced,” explaining that “the ability to raise the whole capital stack was a big value-add” which helped advance the project’s launch described by the developer as “a transitoriented community featuring state-of-the-art amenities and on-site services” sporting “an appealing design” maximizing views of the LMA eastward and OlmstedPark to the southwest and west.

“We look forward to delivering a best-in-class product for our future residents and continuing to foster the live-work-play atmosphere that will drive Boston forward,” Nader says of a project comprised of a 15-story tower with both low- and mid-rise sections plus 1,850 sf of street-level retail. Construction is steel-frame with an exterior of brick, glass and metal panels plus oversized windows. Stainless steel appliances, stone countertops with wooden cabinetry in the kitchens and walk-in closets are among the unit attractions in chasing an upscale renter.

The trio of Juszczyszyn, Coutts and Pierce also assisted a CBRE/NE client in finding acquisition financing for a pair of flex/industrial buildings in Chelmsford as Calare Properties paid $8.9 million to Campanelli for 19 and 21 Alpha Rd. while Cambridge Savings Bank stepped in to loan $7.8 million for the Hudson-based client who is among the Northeast’s leading
owners of industrial real estate. The Chelmsford additions total 127,500 sf, of which all 63,250 sf in 19 Alpha Rd. was available at the time of closing, while 21 Alpha Rd. is 100 percent leased to such firms as NRG Energy, Thermo Fisher Scientific and Universtal Hospital Services.

“Calare will leverage its fully integrated operating platform to retain the long-term tenants at 21 Alpha Road and lease the space at 19 Alpha Rd.,” Coutts outlined, adding he believes the mix of an experienced landlord and improving submarket fundamentals bode well for filling the fallow facility, calling it “ideally positioned for stabilization.” Calare Director of Acquisitions Andrew Iglowski shared that notion while praising lender response for the single-story assets which were “well-maintained” by its seller and were secured as part of an ongoing campaign to identify opportunities “that meet our risk-adjusted returns.”

In the case of Chelmsford., Iglowski says Calare’s asset management crew “has a well-defined business plan for both assets and we have a significant interest for the available building.”