Real Estate Journal — October 10 - 23, 2014 — 17A


M id A tlantic

F inancial D igest

Also arranges $8 million for NNJ office building CronheimMortgage’s Turley & Proscia secure $12 million

ING OF PRUSSIA, PA — David Turley and Janet Proscia arranged a three-year, fixed- rate loan for $12 million on a 102,204 s/f office building in King of Prussia, PA. The debt was sourced from a regional bank, which funded a 65% LTV loan on a non-recourse basis. The property is a single-sto- ry industrial building, which the borrower converted to a multi-tenant office building in 2007. It features high ceil- ings, large open floor plates, low loss factor and easy access from an oversized parking field. The property is strate- gically located less than one mile from the King of Prussia Mall. At the time of closing the property was 85% leased to four tenants, none of which had a remaining lease term longer than 5 years. Proscia noted: “Early-term lease maturities created exit issues for the borrower. This also complicated the financing picture as permanent lenders were cautious about a lever- aged debt basis - $118 psf on suburban office - on a building with no long-term leases.” Turley added: “We found a bank willing to offer a bridge facility at a fixed conventional rate to allow borrower time to work on lease extensions as a set-up to a sale. Very liberal prepayment flexibility allows the borrower to sell or refi- nance as soon as the building is fully stabilized.” In other news, Proscia and Turley arranged an $8 mil- lion mortgage for a Northern New Jersey office transaction. The 120,000 sf class “B+” Of- fice Building had an existing mortgage that was matur- ing. The client wanted mod- est cash out and long-term, fixed-rate loan. Cronheim sourced a 15-year fixed rate loan on a 25-year amortiza- tion schedule from one of its life insurance correspondents and locked the rate at 4.43%. The Property was nearly fully leased at closing with a very stable occupancy history, but all of its leases will roll during the loan term. Given the lending community’s cau- tious view of suburban office, Cronheim had to justify the property’s valuation of $140 psf based on a vacancy as- sumption significantly less than the regional market vacancy. n K

Office building in King of Prussia, PA


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