(Photo Credit: www.southalex.com)
AGM Financial Services team members recently joined Fairfax County officials and community members for an emotional ribbon cutting ceremony following a devastating fire and triumphant rebuild of South Alex.
By now, many have heard the triumph over tragedy story behind South Alex. This two-building, five-story, mixed-use apartment complex replaced the Penn Daw Plaza shopping center in Alexandria, Virginia.
Flashback to Sunday morning, February 8, 2020, nearing 50% completion, South Alex, a $135 million project, burned to the ground. The framing, the metal steel bars inside the concrete, the adjacent prefabbed garage, the surrounding buildings, and even the footers needed to be replaced. It was a total loss.
But the story few have heard is what happened behind the scenes and the people who helped bring South Alex out of the ashes and transform it into the artfully inspired 400-unit property it is today. On February 22, 2023, South Alex and several people involved in the development celebrated its emotional opening.
Committed to Community
South Alex is located at the intersection of South Kings Highway and Richmond Highway near Reagan National Airport. The area had become stagnant with age and wear, causing residents to move away. In recent years, Fairfax County has stepped up efforts to encourage the revitalization of the Richmond Highway Corridor and promised to leave no one behind.
Combined Properties, known for its portfolio of retail and multi-family properties located in the Washington, DC, metro area, rose to the challenge. Founded in 1984 by Ronald S. Haft, Combined Properties has always looked for the true potential of a commercial property. “Instead of thinking about big boxes, we decided to think outside of the box,” said Haft. “We started thinking about community.”
To design a space where people could live, work, eat, and play while embracing art, Combined Properties had to rezone Penn Daw Plaza, which it did with the county’s help in 2014. But they would need financing to bring the project to fruition.
AGM Financial Services successfully obtained a 40-year, FHA-insured Section 221(d)(4) mortgagefor this new Class A community — a$98.9 million construction/permanent loan.
In June 2016, demolition of the Plaza began, and in December 2018, the groundbreaking for South Alex took place, with ALDI lined up as the anchor retail tenant. All was moving forward as planned until the unexpected happened.
Committed to Completion
The accidental fire broke out on a Sunday morning in February 2020. On Monday morning, Margaret Allen, CEO of AGM Financial, called an emergency meeting with all the players from South Alex, HUD, the fire marshal, and inspectors started work immediately. Everyone was committed to rebuilding and fulfilling their commitment to the neighborhood.
AGM did the calculations, and HUD responded quickly. Together with the insurance company’s cooperation, funds were wired, and within a couple of weeks, demo and cleanup began. The Combined Properties team broke ground for the second time in June 2021.
Myles Perkins, President of AGM, successfully negotiated a two-year extension to the start of amortization.. And the interest rate didn’t change —unheard of under such circumstances. Everyone saw the value of getting and keeping South Alex on track.
Reneé Carroll-Smith, Vice President of Servicing, started working in the multifamily industry in 1989 and joined AGM in 2017. Her experience as an FHA loan processor was instrumental in the South Alex project and she shared a unique, personal perspective.
“My mom used to work at the Pentagon, and my father worked at the Kennedy Center, so I was very familiar with the Richmond Highway Corridor,” said Reneé. “Growing up, we would go to the movie theatre, thrift store, and bowling alley. Now I take my grandkids to the Chucky Cheese near South Alex and say, ‘Look, I did that!’ It’s very fulfilling to know that I played a part in giving someone a safe, affordable, beautiful place to live. That’s one of the many things I love about working with AGM. They are committed to affordable housing projects, and it was a dream come true to work with Margaret Allen. When she talks, everyone listens!”
Committed to the Future
South Alex has a promising future. The property’s first tenant, ALDI, held its grand opening earlier this month. Today, the property is 60% leased, With a vibrant mix of shops, restaurants, and community spaces, South Alex pushes the boundaries of modern apartment living with unparalleled amenities, individualized service, and stylish interiors—all with the best of the Washington DC region in easy reach. To see floor plans, take a virtual tour of South Alex.
AGM would like to thank everyone who made this closing a success:
- Borrower: South Alex Subsidiary LLC
- General Contractor: CBG Building Company LLC
- Property Management: Bozzuto Management Company, Combined Properties Inc.
- Architect: Hord CoplanMacht, Inc.
- Borrower’s Counsel: Ballard Spahr LLP
- Civil Engineer: Urban Ltd/Greenway Engineering Inc.
- Mortgage Insurance Provider: Baltimore Field Office of HUD
- Mortgage Backed Securities: GNMA
- Servicing Mortgagee: AGM Financial Services, Inc.
- Counsel To Servicing Mortgagee: Krooth& Altman, LLP
- Surveyor: Urban Ltd
- Title Company: Fidelity National Title Insurance Company
- Appraiser: Kevin O. Curnyn, MAI
- Market Analyst: Real Property Research Group
- Environmental Studies & Review: Dominion Due Diligence
- A&E/Cost Reviewer: JPS & Associates, Inc.
About AGM Financial Services
AGM is a privately held company headquartered in Baltimore, MD, and a nationwide licensed FHA Mortgagee (lender) providing financing for both Market Rate and Affordable Housing communities. Founded in 1990, AGM is a leading FHA lender and GNMA seller/servicer. From new construction and substantial rehab to acquisition or refinance — AGM gets the deal done. Family-owned with over 30 years of experience, the firm has closed over $9 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.