A partnership that includes National Real Estate Advisors and Joss Realty Partners has reached a key milestone in its East Market project in Philadelphia – locking in long-term financing for a portion of the full-block development.
Pacific Life Insurance Company funded the $260 million loan in a deal arranged by JLL. Chad Orcutt, senior managing director, capital markets at JLL, tells Real Estate Capital USA that the full-block project saw substantial interest from lenders due to its scale. The property spans Market to Chestnut Streets and 11th to 12th Streets. “National Real Estate Advisors has created an impressive project with the redevelopment of a whole Center City block into the East Market mixed-use asset,” Orcutt says.
The property’s location – close to the city’s Market East transit hub, which provides access to Philadelphia’s SEPTA Regional Rail Lines also links to Philadelphia International Airport, New Jersey Transit and a subway line – is a major strength.
The developers are building the $1 billion project as Philadelphia is seeing its population grow due to its relatively affordable cost of living and proximity to other cities like New York and Washington, DC. Part of the project includes the adaptive reuse of a 100-year-old warehouse into a creative office space and the renovation of an office building into a boutique hotel. Finally, construction will include the development of a 19-story medical building for Thomas Jefferson University and Jefferson Health.
“It is a larger, mixed-use asset with complexities, including a ground lease structure. We had high lender interest, and it is perfect timing for this project, as it is now stabilized. We could also lock in long-term, fixed-rate money as rates continue to rise,” Orcutt says.
Snellenberg’s department store, the long-time occupancy of the property, closes its doors
National Real Estate Development acquires the property
First building in the mixed-use project is completed
National Real Estate Advisors and its partners obtain $260 million of financing on a component of the project