In 2004, Forest City Enterprises, one of the nation’s premiere developers, was awarded the redevelopment rights to the Public Health Services Hospital building located in the historic Presidio in San Francisco, CA.  The Presidio Trust, a Congressionally-chartered body responsible for the development of The Presidio, chose Forest City’s RFP for conversion of the building into “Presidio Apartments,” a multi-family rental apartment property. 

The adaptive reuse project primarily consists of the conversion of the 1932 hospital building into six floors of luxury rental apartments, containing 154 units. Seven 3-bedroom townhomes are also being delivered on a separate parcel near the main building. Project completion is expected in 2010. 

In October of 2008, Forest City chose National as a mezzanine investor, and the Fund made a loan in the amount of $13 million. NEBF’s mezzanine loan represented approximately 12% of the overall capital required to finance the gross development cost of approximately $104 million. Alongside the mezzanine loan, the Fund’s strong balance sheet provided an $8 million partial repayment guaranty on behalf of the borrower to the project’s construction lender. 

The investment was appealing due to its unique combination of The Presidio’s significance as a national landmark, National’s mezzanine priority capital position, and the opportunity to maintain our ongoing relationship with Forest City. The project was sucsessfully completed in late 2010 and in conjunction with the developer, National is seeking LEED Gold certification for the project.