$17.3MM Seattle Office Loan: Creative Recapitalization and Successful Resolution

A $17.3 million co-working office loan in downtown Seattle was successfully restructured after the transaction had stalled amid one of the weakest office markets in the country. Years of stagnating office values necessitated a comprehensive reassessment of the property’s worth and the options available to stakeholders.

Direct engagement with the borrower, along with coordinated negotiations involving a C-PACE lender, led to a refinance that produced proceeds exceeding what was expected from a simple sale. The restructuring was unique in its approach: it preserved the lender’s secured position, provided an immediate payoff through the infusion of C-PACE funds, and established a mechanism for future equity participation. This was achieved through a joint-venture agreement granting future equity splits and Put rights, both tied to any potential recovery in the office market.

This outcome highlights the power of strategic valuation, thoughtful structuring, bankruptcy foresight, and clear communication with the borrower. By leveraging these elements, the parties were able to unlock additional upside potential, demonstrating that even in challenging office markets, complex workouts can offer significant opportunity when handled with creativity and precision.