HFF announces $324M in construction financing and joint venture equity for the redevelopment of Arsenal Yards in Watertown

Arsenal Yards rendering architect credit Prellwitz Chilinski Associates

BOSTON Holliday Fenoglio Fowler, L.P. (HFF) announced $324 million in construction financing and joint venture equity for the development of Arsenal Yards, a six-building, mixed-use redevelopment of the former Arsenal Mall in Watertown, MA.

The HFF team worked on behalf of Boylston Properties, The Wilder Companies and Jonathan Bush to source institutional investors advised by JP Morgan Asset Management as joint venture equity partners, providing $102 million of equity, and secure a $222 million construction loan from Wells Fargo Bank.

Arsenal Yards sits along the banks of the Charles River just west of Boston in East End Watertown.  With construction currently underway and the first phase scheduled to open in 2019, Arsenal Yards will create a vibrant urban neighborhood with more than one million square feet that will include 250,000 square feet of destination shops and eateries, anchored by Roche Bros. and The Majestic Cinema; Yard Works (200,000 square feet of new and existing office and lab space); Blvd & Bond (425 contemporary residences); a 150-room Hampton by Hilton; The Fitness Collection and a revitalized Arsenal Park with expanded access to the Charles River.

An abundance of surrounding demand drivers exist, including corporate headquarters for AthenaHealth and Bright Horizons – immediately adjacent to the project – and New Balance, Harvard Business School’s campus expansion, Harvard’s $1.0 billion Science and Engineering Complex set to open in 2020, and the adjacent LINX office/lab complex (fully leased) recently developed by Boylston Properties.

The HFF debt and equity placement teams representing the borrower included senior managing directors Fred Wittmann and Coleman Benedict, senior director Brett Paulsrud and associate Henry Schaffer.

“HFF was able to work closely with the development team to secure a capitalization structure that met their objectives,” Paulsrud said. “This redevelopment will dramatically transform the landscape of Watertown, adding a significant amenity base to the area.  It will be very exciting to watch this best-in-class partnership create a new destination for surrounding residents and businesses alike.”

Arsenal Yards rendering architect credit Prellwitz Chilinski Associates

Boylston Properties is a Boston-based real estate developer of urban mixed-use projects including retail, residential, hotel, office, and research buildings.  With over 30 years of experience and a contemporary vision, many of Boylston’s high visibility projects have become part of the new urban landscape in metro Boston. Included in Boylston’s portfolio is the recently opened 150-room Marriott Residence Inn Watertown and LINX, a 185,000 square feet lab building, both near Arsenal Yards.

The Wilder Companies is a Boston-based real estate development, management, and leasing firm specializing in the positioning of retail properties.  Privately held and owner managed, Wilder’s mission has been and continues to be to create vibrant shopping places that meet and exceed the expectations of customers, retailers, and investors.  From lifestyle centers, urban properties, and community centers to mixed-use developments and super-regional malls, The Wilder Companies has developed, managed, and leased more than 20 million square feet of retail properties throughout the United States and Puerto Rico.  The company continues to have a diverse portfolio of properties throughout the East Coast.

J.P. Morgan Global Alternatives is the alternative investment arm of J.P. Morgan Asset Management.  With more than $130 billion in assets under management and over 800 professionals (as of March 31, 2018), the firm offers strategies across the alternative investment spectrum including real estate, private equity and credit, infrastructure, transportation, liquid alternatives, and hedge funds.  Operating from 23 offices throughout the Americas, Europe and Asia Pacific, its independent alternative investment engines combine specialist knowledge and singular focus with the global reach, vast resources and powerful infrastructure of J.P. Morgan to help meet each client’s specific objectives.

HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry.  HFF, together with its affiliates, offers clients a fully integrated capital markets platform, including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing.  HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc. (NYSE: HF).