PSP Investments Lands $1B Refi for The Wharf in Washington, D.C. – Commercial Observer
The Canadian pension investment fund that in April acquired majority ownership of Washington, D.C.’s The Wharf has landed a $1 billion loan to refinance the development’s debt.
Public Sector Pension Investment Board (PSP Investments) secured the five-year, $1.03 billion loan in the wake of its $1.8 billion deal to take over The Wharf from Hoffman & Associates and Madison Marquette. Wells Fargo, Goldman Sachs and Morgan Stanley originated the loan according to Fitch Ratings, and the trio plan to sell the debt as a commercial mortgage-backed securities trust, expected to close later this month.
The new mortgage tied to a majority of the 3.5 million-square-foot, mixed-use district will combine with $125 million mezzanine financing, as well as $59.8 million of PSP’s equity, to pay off roughly $1.15 billion in existing debt. The funds will also go toward paying off other costs associated with the deal closure, as well as $18.7 million worth of planned tenant improvements. Bisnow first reported the news.
Representatives for PSP, Wells Fargo, Goldman Sachs and Morgan Stanley did not immediately respond to requests for comment.
Eastdil Secured reportedly brokered both PSP’s buyout of the Wharf and its financing, per Bisnow. Representatives for Eastdil did not immediately respond to requests for comment.
PSP was an investor in The Wharf from the beginning, ponying up a $225 million equity investment in the project in 2014. The first phase of the development completed construction in 2017, and the previous majority owners secured an $800 million, Wells Fargo-led refinancing of the project in June 2019.
Goldman Sachs provided an $847 million construction loan on the project’s second phase just a few months later. The second phase of the project finished in 2022.
The Wharf’s roughly 1 million-square-foot office component was 93.4 percent leased to 18 tenants as of February, according to Fitch Ratings. Law firm Williams & Connolly is the largest tenant there after signing for 313,000 square feet in early 2024. Fellow firm Kelley Drye & Warren inked a 65,000-square-foot lease in the same building in late 2023.
The district’s retail component, meanwhile, was 92.1 percent leased to tenants like Georgetown Optician and Mediterranean-style restaurant La Vie, while its multifamily component was 90.8 percent leased.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
