Casting the Right Player in the Right Role

In 1998, Forest City Enterprises solicited offers from third-party developers to construct a 225,000 SF speculative office building at the Ballston Common Mall, which Forest City owned and operated. The proposed office building would be constructed in an air-rights parcel atop a newly built retail pavilion, which presented a number of challenges regarding the construction, ownership and operation of the property. The mall was governed by a spiderweb of covenants, easements, and ground leases existing between three private owners, two department store anchors, and Arlington County, which owned and operated a public garage that served the project.

Monument Realty and our investment partner, Apollo Real Estate Advisors, succeeded a number of local and national developers by structuring a transaction that allowed each party to focus on its strengths and assume any mandated risk. We also worked out a commitment from Prudential Insurance Company of America to fund 100% of the project costs upon substantial completion of the base building, as well as 100% of leasing costs thereafter—a structure that we would later replicate on numerous other projects.

With that commitment in hand, we were able to negotiate a non-recourse construction loan from Bank of America for 100% of construction costs, allowing Forest City to construct the office building and act as the construction borrower. This allowed Forest City to control a complicated construction project above a valuable retail asset. Meanwhile, Prudential, Apollo Real Estate Advisors, and Monument Realty assumed 100% of the market risk in a booming R-B Corridor office market while Bank of America provided construction financing with a rock-solid take-out commitment.

In March 2000, eight months prior to the completion of construction, Monument Realty signed a 12-year, triple-net lease with E*Trade Bank for the entire building, beating pro forma rents by over 10% on a net effective basis. The partnership received leveraged returns that were off the charts and Forest City welcomed the foot traffic from over 1,000 new office workers.

The team makes it happen.

Kirk Salpini

Senior Vice President of Development

Michael Darby

Principal, Founder

Russell Hines


Terry Fortune

Vice President of Construction

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