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Philadelphia strong for commercial real estate transactions

On Behalf of | Dec 26, 2014 | Commercial Real Estate |

Commercial real estate transactions, including sales and purchases, are often strategically important to a company or business. Philadelphia has become a strategic location for investors from New York, as it continues to lure investors with commercial real estate opportunities. Recently brokered was the sale and financing of a 19-story office and retail building in Philadelphia. The property provides 253,732 square feet of office space and 22,723 square feet of retail space.

Financing for the project was provided by a major bank which provided a $36.5 million loan to the investment group to finance most of the property acquisition; $30 million was loaned to finance the purchase and $6.5 million was loaned to finance upgrades to the property. One of the parties who helped negotiate the financing noted that the asset is expected to provide strong returns. The investment group also recently purchased another office and retail property in Philadelphia for $100 million with a $90 million loan.

According to one of the parties who helped negotiate the transaction, Philadelphia has been a stable market and performed well during the recent downturn. The return on risk in Philadelphia is measured as better than in other similar markets such as New York and others. The Philadelphia commercial real estate market remains strong, as experts expect office sales transactions in Philadelphia’s central business district to exceed $1 billion for the year.

Commercial real estate transactions can be complex and can include due diligence activities; negotiations, contracts for purchase and drafting multiple contracts; compliance issues; and financial transactions. Because there can frequently be many intricacies to a commercial real estate transaction it is necessary to be familiar with, it is important to have a solid understanding, knowledge of and proper guidance through the process.

Source: Commercial Observer, “JLL Closes Sale and Financing of Philadelphia’s 1635 Market Street,” Damian Ghigliotty, Dec. 23, 2014


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