Onni's Seattle towers get $41.7M to keep waiting

Toronto-Dominion Bank's $41.7 million commitment to Onni Group's Block V covers land carry and planning work at 2301 and 2331 Seventh Avenue while the two-tower project near Seattle's South Lake Union, designed by Graphite Design Group for residential, office and retail, remains in entitlements. Stewart Title is trustee on the financing, which adds to a $358 million budget that has been in planning stages for years.

The land basis is what this loan prices against. Onni bought the roughly half-block site from Clise Properties for $78.75 million in 2018, so $41.7 million covers a little over half of a basis set eight years before the financing closed. It follows a $170 million loan secured in December 2023, and the coverage ties the two together by sequence rather than by collateral; if both sit against the same asset, they put $211.7 million of debt on a site with no permits.

Elsewhere, construction money has gone where the program was already settled. Trammell Crow and Daiwa House break ground on a spec second phase in Houston on the strength of Phase I owner-occupant sales, and in Norwalk an OZK construction loan underwriting the office's next use repriced two buildings as apartment feedstock. Block V has no such proof point, so a sponsor balance sheet is doing the work a rent roll would normally do.

Meanwhile, Onni has been buying in its home market, completing the purchase of the former Hudson's Bay Company department store in downtown Vancouver for $112.5 million earlier this year, a CBRE and Marcus & Millichap-brokered trade out of the RioCan REIT-Bay joint venture's receivership. A finished building bought at a discount and an unentitled parcel near a repriced Seattle submarket both lean on the same wager: the basis is the return, and the hold is the mechanism.

The apartment bid has split into an income half and a scarcity half, with patient capital underwriting the 2028-29 supply gap while value-add buyers set the clearing basis lower. Onni's eight-year hold is that trade in its purest form, and the $78.75 million basis is the evidence. The financing also shows the other edge of the trade: patience funded with land debt today because construction debt is not yet available to a project without entitlements. Until the permits print, TD's collateral is a half-block of Seattle dirt, a sponsor's balance sheet, and a design that has sat on the shelf for years.