This Week's Philadelphia Deal Sheet
Southern Land Co. landed a major loan backed by the unsold condo units in the tallest residential building in Philadelphia — and in a sign of the times, it didn't come from a bank.
The developer obtained a $70M loan backed by the 31 condo units and 81 parking spots yet to be sold in The Laurel, overlooking Rittenhouse Square. Private equity and debt firm Northwind Group originated the loan under flexible terms from one of its closed-ended debt funds. A Newmark debt and structured finance team arranged the loan.
Southern Land CEO Tim Downey characterized the loan as a refinancing for The Laurel, which began moving in condo owners in January after opening 1909 Rittenhouse, its 184-unit rental portion, in November. The Laurel totals 65 condo units, and the first 34 condos to be sold fetched a combined $154M. The rental portion, which occupies the lower floors above the building's 44K SF of retail, is 90% leased.
SALES
Long Island-based Vastgood Properties purchased the 70.5K SF grocery-anchored shopping center at 106 Airport Road in the Chester County suburb of Coatesville. Dubbed Airport Village, the center is 87% occupied and anchored by an Aldi. The seller, New York-based Nassimi Realty, was represented by Neuman Commercial Group principal Gil Neuman.
According to Chester County property records, Vastgood assumed the $6.5M loan originated by Goldman Sachs in 2016, which has since been securitized. The loan carries a remaining balance of just over $6M, with an interest rate fixed at 4%. It matures in 2026.
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Los Angeles-based The Carson Cos. purchased a three-building portfolio of industrial properties in Southwest Philadelphia from Bryn Mawr-based Alliance HP for a combined $24.7M on Aug. 3, according to city property records. The sales of 3250 South 78th St., 3201 South 76th St. and 3440 Bartram Ave. were originally reported in mid-August. The buyer's identity was unknown.
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South Korean contract development and manufacturing organization SK Pharmteco agreed to acquire a controlling ownership stake in the Center for Breakthrough Medicines, the CDMO facility operating within the Discovery Labs complex in King of Prussia, the Philadelphia Business Journal reports.
SK Pharmteco is the CDMO subsidiary of investment giant SK Inc., which invested $350M into CBM in late 2021. Though terms of the most recent sale weren't disclosed, MLP Ventures founder Brian O'Neill remains chairman and partial owner of CBM, as well as controlling owner of the Discovery Labs campus itself, PBJ reported. Financial terms of the deal, including SK Pharmteco's new ownership percentage, weren't disclosed.
LEASING
Ross Dress For Less signed a lease to occupy the 26K SF former Marshalls store at 1044 Market St., on the southern side of a three-block stretch of Market Street where Fashion District Philadelphia mall takes up the northern side, PBJ reports.
Marshalls vacated the storefront, owned by Jenel Real Estate, earlier this year, PBJ reported. Ross will relocate from its space within the former Lit Brothers department store building at 701 Market St., which also contains the flagship store and corporate headquarters of Five Below.
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Mental and behavioral health provider Praesum Healthcare Services signed two medical office leases on the same block in Port Richmond, both arranged by CBRE. Praesum will occupy 58K SF across several floors in the former Northeastern Hospital building at 2301 East Allegheny Ave. as well as the entire 29K SF building at 3261 Tulip St.
Praesum, which provides inpatient and outpatient services for the treatment of substance use disorder, signed the leases as part of its acquisition of Beacon Point Recovery Center. Beacon Point had operated a 92-bed residential facility and a 20-bed detox facility in the Philadelphia area, Behavioral Health Business reported.
FINANCING
Trinity Realty Cos. has secured a bridge-to-HUD loan for its newly completed multifamily building at 2224-50 Germantown Ave. on the western edge of West Kensington.
The $16M loan, arranged by Scope Capital Group and provided by an unnamed regional bank lender, comes with three interest-only years and no prepayment penalties, allowing for conversion to a 35-year, fixed-rate loan insured by the Department of Housing and Urban Development.
CONSTRUCTION
The city of Philadelphia held groundbreakings for two recreation center renovation projects in the Southwest Philly neighborhood of Kingsessing this week: a $25M overhaul of Kingsessing Recreation Center and a $20M update of F.J. Myers Recreation Center. Kingsessing Rec Center will receive a new artificial turf field funded by a $200K grant from the NFL Foundation and the Philadelphia Eagles.
A third groundbreaking, for a $15M redevelopment of Johnny Sample Recreation Center in Cobbs Creek, is scheduled for later in the week. All three projects are part of the Rebuild initiative, which has pledged hundreds of millions of dollars during Mayor Jim Kenney's nearly completed tenure, funded by a tax on sweetened beverages.
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McGovern Holdings and Saxum Real Estate opened the 294-unit Hagert & York apartment building in a rapidly densifying area of East Kensington. The amenity package includes a parking garage with electric vehicle charging stations, two rooftop lounges and a coworking/coffee shop concept.
The building was named Hagert & York because it sits on the 1900 block of East Hagert and East York streets, steps from the York-Dauphin subway station on the Market-Frankford Line. On the 1800 block of York, the 126-unit Mill at York Station delivered late last year. Two other apartment buildings of similar size are under construction within three blocks of Hagert & York.
THIS AND THAT
Drexel University's LeBow College of Business received a $10M gift from the nonprofit Wilbur C. and Betty Lea Henderson Foundation, which will allow for the creation of a dedicated real estate institute, PBJ reports. In addition to classes, the institute will establish a fund for students to co-invest in university projects and seed private developments when it launches next year.
The Henderson Foundation was formed by developer and Henderson Group founder Wilbur Henderson, who died in 2013. The new entity will be called the Wilbur C. Henderson Real Estate Institute, and a national search will be conducted to find a person to lead it, the PBJ reported.
