When a longstanding PNC Real Estate client discovered the 24-story One Franklin Plaza office building in Philadelphia, Pennsylvania was for sale at an attractive price, he looked to his trusted lender, PNC, to finance the acquisition and redevelopment of the vacant high-rise.
Built in 1980, One Franklin Plaza was tired in appearance and sat unoccupied. Yet, the property, located in Philadelphia’s central business district, had many appealing features, including 12-foot ceilings, ample parking and unobstructed views of the city.
Enter Ronald Caplan, an expert in the redevelopment of large scale urban properties and owner of PMC Property Group, who acquired the property with his equity partner, the Lubert Adler Real Estate Funds.
After financing the acquisition of One Franklin Plaza, PNC Real Estate and PNC Capital Markets arranged as left lead a $119 million syndicated construction loan for Caplan. The construction loan provides the capital for Caplan and Lubert Adler to substantially revitalize the property into a like new, Class A, mixed-use project.
The first nine floors will be devoted to offices, with a small retail space on the ground floor and an upgraded lobby. The building’s exterior is being re-skinned with a glass curtain wall, and the interior office space on floors two through nine will be fully rebuilt resulting in a functionally new office building inside and out. Due to his construction expertise, Caplan will also offer turnkey office space for corporate tenants, a rare offering in Philadelphia.
Floors 10 through 24 will include 360 spacious multifamily units, featuring floor-to-ceiling glass windows, hardwood floors, granite counter tops, stainless steel appliances and in-unit laundry. Planned building amenities include a fitness facility, community room, rooftop deck, bike share, storage rooms, pet salon and dog-park. Balconies, an uncommon amenity for most high-rise apartments, will be available for 90 units.
In discussing the deal, Senior Vice President of PMC Arrus Farmer noted, “Bringing new vitality to the center of Philadelphia through the investment in One Franklin Plaza presented some unique challenges. Having worked with PNC over the years, we knew the team understood our objectives and could provide the right type of financing to make the deal a reality.”
Date: October 2016
Location: Philadelphia, Pennsylvania
Financing Amount: $119 million; PNC hold: $60 million
Financing Type: Construction loan
Scope: 360 multifamily units; 203,392 square feet of office space; and 5,675 square feet of ground floor retail
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