Despite Tight Money, Some Developers Keep Building

On a recent rain-soaked Tuesday morning in the Twinbrook Metro station's parking lot in Rockville, executives of the Chevy Chase development firm JBG Cos. mingled with transit officials beneath a white canopy.

The mayor of Rockville, Susan R. Hoffmann, was a guest of honor. Planners and architects sipped coffee from porcelain cups. A pile of wet umbrellas sat drying in a corner.

It was the start of a long-awaited ceremony. After more than a decade of discussions and bureaucratic delays, JBG was about to break ground on a $1 billion project with apartments, office buildings and a "main street" of retail.

After a few comments lauding the project's pedestrian-friendly design, the executives and officials walked into the rain, stuck shovels into a patch of uncovered earth and tossed dirt into the air.

Thus, the Twinbrook project joined a handful of commercial projects in the Washington area to break ground in recent months despite a tightened lending environment. While financing is taking longer to secure, and banks are more cautious than they were before the start of the credit crunch this summer, some developers are still finding ways to build.

JBG, one of the largest developers in the Washington area, secured a construction loan for the Twinbrook project in the midst of the crunch, executives at the company said.

The project, on which work began Nov. 13, is being partially financed by JBG Urban, a $2.5 billion pool of equity created by the firm this summer to invest in a portfolio of 93 projects throughout the Washington area.

JBG Urban includes commitments from Morgan Stanley Real Estate, an arm of the New York investment bank, and MacFarlane Partners, the San Francisco real estate firm headed by Victor B. MacFarlane, owner of the D.C. United soccer team.

JBG is also building North Bethesda Market, which is to include a Whole Foods Market, an LA Fitness gym and 400 apartments a block from the White Flint Metro station. That project began Dec. 6, also using equity from JBG Urban and debt financing.

Brian P. Coulter, a JBG managing partner, said the firm's ability to access such pools of cash from large investors could give it an advantage over smaller competitors, if the crunch limits financing to the point where it begins to shut other builders out.

"That may be the outcome of this, that we will be in the position to deliver projects where other developers will have trouble getting their projects financed, and therefore started," Coulter said. "Many of these capital market reactions tend to be exaggerated reactions to events, and we really try to take a long-term view."

On Dec. 18, the Meridian Group, a Bethesda builder, began work on two office buildings that will be part of its National Gateway at Potomac Yard in Arlington. That development is to have 2.9 million square feet of office, residential, hotel and retail space, said Bruce S. Lane, Meridian's executive vice president and managing director.