CBRE Gives Brookwood Financial a Boost in Philadelphia

CBRE Capital Markets recently came through in a big way for client Brookwood Financial Partners.

By Barbra Murray, Contributing Editor

Charles Foschini
Charles Foschini, CBRE Capital Markets

CBRE Capital Markets recently came through in a big way for client Brookwood Financial Partners. The commercial real estate services firm’s Debt & Structured Finance team originated $157 million in bridge financing for Brookwood’s acquisition of an approximately 1.6 million-square-foot office portfolio spanning a handful of markets in suburban Philadelphia.

“Brookwood Financial Partners has been dealing with our office for over 15 years. They continue to be innovative in their approach to acquisitions, this being the largest in their corporate history,” Charles Foschini, a vice chairman with CBRE, told Commercial Property Executive.

Starwood Property Trust provided the financing, which came in the form of a two-year loan with a floating interest rate and 70 percent loan-to-value ratio, as well as options to extend. Starwood was one of many lenders that were eager to come to Brookwood’s aid.

“We selectively approached the market based on the size of the deal, the complexity of the transaction, the sheer number of assets and the tight due diligence time frame. Every lender we approached favorably received the opportunity,” Foschini said. “Starwood was chosen based on previous experience with us and the borrower, and their promise to deliver in the time frame–all of which occurred.”

The portfolio is quite a catch, encompassing 29 class A and B office properties, and offering notable value-add opportunity. The collection, which features an average occupancy level of approximately 85 percent, includes three buildings totaling 167,280 square feet in Bucks County; six buildings accounting for 457,913 square feet in Fort Washington; nine structures with a total of 318,137 square feet in Horsham; and another 11 buildings featuring an aggregate 668,631 in Allentown in Lehigh Valley.

“As value buyers, we look to acquire sound assets at substantial discounts to replacement cost near the inflection point of a market recovery. The office market in suburban Philadelphia is now entering the early stages of its recovery, as evidenced by its consistent positive absorption and high projected rental rates,” Thomas Brown, Brookwood president & director of real estate acquisitions, said in a prepared statement.

The financing will also allow Brookwood to reposition the portfolio through approximately $7.6 million in capital improvements.