Commercial real estate lender 3650 REIT is making a play in Wilmington, Delaware via an $85 million loan to refinance existing debt on WSFS Bank’s corporate headquarters.
The loan, which carries a term of 120 months, was originated on behalf of local manager The Buccini/Pollin Group. The property drew the interest of 3650 due to its high quality and location in the heart of America’s corporate capital, said Toby Cobb, co-founder and managing partner.
“3650 continues to take a surgical approach to investing in office assets with an emphasis on precision to find the change winners in today’s unpredictable market environment,” Cobb told Real Estate Capital USA. “The property’s prime location at the northern gateway of the city’s central business district makes it a true cornerstone of the Wilmington office market.”
Delaware is a common destination for corporate headquarters due to its favorable tax and legal regimes. The area is home to roughly half of the US credit sector, including such businesses as JPMorgan Chase, Discover, Capital One, and Citibank, and has historically had a strong office market as a result of corporation-friendly policies, including ease of incorporation, laws protecting business owners, the corporate tax system and strict out-of-state practice laws, which create high demand for Delaware-based corporate attorneys and law offices.
As uncertainty in the office sector continues, 3650 believes that WSFS Bank Center is a trophy office asset in Wilmington that will be a change winner as more companies finalize their long-term plans to return to the office.
“The term retail apocalypse was coined years ago, with shifts in that sector being accelerated by the pandemic, therefore making the change winners in retail easier to identify,” Cobb said. “Comparatively, the volatility in office was much more sudden, making it more challenging to identify the winners and assess the range of potential outcomes in the asset class. As return-to-office plans and commuting patterns remain fluid, we’ve been incredibly selective and idiosyncratic about which office assets we’ve invested in.”
Chris Buccini, co-president of The Buccini/Pollin Group, added that, while the US economy is still recovering from the pandemic and international conflict is driving volatility, 3650 was able to move quickly to close this loan despite mounting uncertainty in the market.