$54M Financing Deal Closes for Suburban Philly Shopping Center
- Jul 25, 2008
Pennsylvania Real Estate Investment Trust has secured $54 million in financing on Paxton Towne Centre, the company’s 703,000-square-foot shopping center in Harrisburg, Pa., less than 15 miles from Philadelphia. The transaction marks PREIT’s third financing deal within the last month. PREIT locked in on a mortgage loan on Paxton Towne Centre at a fixed rate of 5.837 percent for the initial term of the three-year loan, which comes with the option of two one-year extensions. U.S. Bank National Association, lead arranger and administrative agent on the transaction, provided the financing along with Aareal Capital Corp., which acted as syndication agent. PREIT used the proceeds from the loan to repay part of its revolving credit facility, and for general corporate purposes. Paxton Towne Centre sits on Route 22 in Pennsylvania’s retail corridor between I-83 and I-81. PREIT completed construction of Paxton Towne Centre in 2001; three years after the company acquired a 100-acre parcel for the project, which carried a development price tag of $54 million. Today, the property is 100 percent occupied with a list of anchor tenants that includes Bed Bath & Beyond, Kohl’s and Target. The currently challenging lending market does not appear to have presented too great a challenge for PREIT. In late June, the company announced it had obtained a $45 million mortgage for the 300,000-square-foot Christiana Center, its 10-year-old power center in Newark, DE. Last month also brought news of the company’s completion of the $20 million financing of Creekview Center, a 425,000-square-foot shopping center that PREIT developed seven years ago in Warrington, Pa. Proceeds from both loans were also used for general corporate purposes, as well as to pay down outstanding debt under the company’s revolving credit facility. As is the case with Paxton Towne Centre, Christiana Center and Creekview Center are both leased to maximum capacity. Headquartered in Philadelphia, PREIT was established nearly a half-century ago. One of the country’s first equity REITs, the company focuses predominantly on retail shopping malls and power centers, and has a retail portfolio consisting of 55 properties with a total of approximately 34 million square feet in 13 states across the eastern portion of the U.S. Company stock opened today at $19.07.