This Week's Philadelphia Deal Sheet
San Francisco-based investment firm FPA Multifamily has purchased a large apartment asset in Delaware County for nearly $100M, the second major transaction in the sector for the Philly region amid an ice-cold transaction environment.
FPA paid $96.5M to acquire the 352-unit Valleybrook at Chadds Ford from a fund managed by Crow Holdings Capital. A JLL team led by Senior Managing Directors Mark Thomson and Carl Fiebig, Senior Director Francis Coyne and Director Tyler Margraf marketed the property on behalf of the seller and arranged acquisition financing.
Valleybrook at Chadds Ford was built in 2002 with a mix of one-, two- and three-bedroom units averaging a shade under 1K SF, and was marketed as a value-add investment. It sits along U.S. Route 202, one of the primary business corridors in Delaware County.
SALES
PREIT has sold the 941K SF Cumberland Mall in the South Jersey township of Vineland for $45M to an unnamed buyer, the Philadelphia Inquirer reports. The proceeds will be used to pay off the mortgage on the property and contribute $6M to other debt service, which PREIT has been furiously working to pay down for over a year.
The mall was among the least successful properties remaining in PREIT's slimmed-down portfolio, with sales per SF of $450 as of the second quarter, according to company filings — with only the Plymouth Meeting Mall falling below that number.
Private equity and institutional capital investor KKR has acquired the 1,018-unit apartment complex named Presidential City from Post Brothers for $357M, the highest price ever paid for a Philadelphia residential property by more than $100M. Mack Real Estate Group joined KKR as an equity partner in the acquisition.
After purchasing the 1950s-vintage Presidential City a decade ago, Post Brothers spent over $100M on a complete overhaul of the project and refinanced with a $290M loan at a fixed rate of 4.3% in 2019. JLL's Multi-Housing Capital Markets Investment Sales and Advisory team marketed the property on behalf of Post Brothers.
CONSTRUCTION
An affiliate of Endurance Real Estate Group has acquired a 93-acre site in immediate proximity to Exit 10 of Interstate 81 in Chambersburg, Pennsylvania, as part of a joint venture with the Guardian Life Insurance Company of America. Immediately upon the closure of the transaction, Endurance began construction on a 1M SF speculative distribution center, expected to deliver by the end of 2023.
Endurance secured construction financing from PNC Bank National Association for the $115M project, the first time Endurance has partnered with PNC or Guardian. Endurance was represented by Cushman & Wakefield in arranging the financing, and has named the brokerage the exclusive leasing agent for the project.
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Post Brothers has erected two tower cranes as it progresses on construction at its next 1,000-unit multifamily development in Philly, this one at the corner of South Broad Street and Washington Avenue, Philadelphia YIMBY reports. Post acquired the site and development plans from Bart Blatstein's Tower Investments at the start of the year, at which time it was a vacant lot. At the start of November, construction had already reached the fourth of what permits say will be 15 stories, Post Brothers President Matt Pestronk told Bisnow Tuesday.
FINANCING
Jefferson Health has received a $50M donation to help fund the specialty care tower currently under construction at 11th and Chestnut streets, one of the final pieces of the multiphase East Market development project, the Philadelphia Business Journal reports.
The gift from South Jersey beverage bottling and distribution magnate Harold Honickman and his family is the largest ever received by Thomas Jefferson University and its affiliates. In exchange, Jefferson will name the 462K SF, $762M building the Honickman Center.
