Davis has provided $44 million in construction financing for a downtown residential conversion project, according to Connect CRE.
The deal is a straight office-to-residential conversion loan -- the financing vehicle that's defined this cycle for owners sitting on older office stock in a market where leasing has bifurcated hard between trophy towers and everything else. Those projects skip ground-up structural work in favor of full interior gut, new mechanical and electrical risers, and a new life-safety package to meet residential code, which is a different trade mix than new construction: less structural steel, more MEP, more fire protection, more plumbing riser work floor by floor.
Conversion financing has been the one bright spot in an otherwise cautious construction lending market this year, and a $44 million close is a meaningful single-building number -- big enough to fund a full gut-and-rebuild on a substantial downtown floor plate.
For mechanical, electrical, and fire-protection contractors watching the office-conversion wave, this is one more data point that the financing side of that trade is still moving even as new ground-up office construction stays frozen almost everywhere in the region.