CBRE Capital Markets Arranges $184M Sale, Financing of Pennsylvania Office Portfolio

CBRE Capital Markets has completed the sale and financing of a 29-building, 1.6 million-square-foot office portfolio located throughout suburban Pennsylvania for $184 million. The portfolio consists of low and mid-rise Class A and B office buildings located in the Horsham, Bucks, Lehigh Valley and Fort Washington submarkets of suburban Philadelphia. The properties range in size from 25,000 to 115,000 square feet. James Gunning and Donna Falzarano of CBRE New Jersey’s capital markets team arranged the $184 million in permanent first mortgage financing on behalf of buyer G&I VI Interchange Office L.L.C., a joint venture between a fund managed by DRA Advisors L.L.C. and Brandywine Realty Trust. CBRE Pennsylvania’s Robert Fahey, Michael Hines and Douglas Joseph represented Brandywine, the seller. “We got into the deal on the cusp of the CMBS market implosion,” Gunning, a senior director, told CPN. “If the deal came 90 days earlier, it would have went to Wall Street. So we looked toward the life insurance companies.” John Hancock Financial Services provided the funding for the transaction, which is a seven-year deal with a fixed rate of 5.9 percent and three years’ interest only. He noted an overall difficulty with lenders capping proceeds for one transaction at $50 million, and life companies have since stepped up to the plate. This is just the latest transaction in CBRE Capital Markets’ busy year. Last week, senior managing director Michael Makar and director Jack Standeford, both in CBRE Capital Markets’ Seattle group, secured $185 million in construction and permanent debt loan financing on behalf of Bellevue Place L.P. to facilitate the refinancing of the existing Hyatt Regency Hotel and construction of its new tower. Pacific Life Insurance Co. financed the combination construction-permanent loan, structured on a 13-year term. A 351-room tower with 36,000 square feet will now join the existing 24-story, 382-foom full service hotel (pictured), which is located in Downtown Bellevue. The construction is scheduled for mid-2009 completion. Last week, CBRE Capital Markets debt & equity finance team in Dallas-Forth Worth also arranged $100 million in equity and acquisition financing for 589,000-square-foot The Fountains On The Lake retail center, located at Southwest Freeway and Fountain Lake Drive in Stafford, Texas. Managing director Randy Fleisher and vice president Jason Piering structured the joint venture financing on behalf of Dunhill Partners.