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Commercial real estate finance firm Eastern Union has secured $9.75 million in financing toward the acquisition of a three-property, 218,961-square-foot, flex industrial/office portfolio along Philadelphia’s Delaware River waterfront,
The portfolio — acquired off-market at a “price below replacement cost” — includes 20 Jackson Street, 38 Jackson Street, and 21 Wolf Street, according to a press release Friday.
Marc Tropp, a senior managing director with the company, arranged the mortgage on behalf of a partnership consisting of Michael Bauer through his investment arm, New York City-based BASH Capital, and West Chester, PA-based Joseph A. Cunane. The partnership owns and has successfully leased a neighboring property at 22 Wolf Street.
The overall $9.75-million loan applies $5,194,300 toward acquisition, in conjunction with a credit facility of $4,555,700 for renovations and leasing costs. In addition to the mortgage, the partnership raised $4,400,000 in equity. The two combined acquisition sources total $14,150,000.
The portfolio is situated within an area considered to be Philadelphia’s most actively developed big-box retail/industrial corridor — and a prime location for redevelopment. It is located in immediate proximity to I-95, major ports, arenas, and downtown Philadelphia. The three properties are at the center of a major logistics hub that includes a new Amazon logistics headquarters, a UPS distribution center, and a 700,000-square-foot retail power center anchored by IKEA, Lowe’s, and Best Buy.
Further reflecting development trends within the area, a seven-acre manufacturing facility owned by the chemical company Inolex — situated directly opposite the three properties — is in the process of being sold to a large developer. The partnership expects that the sale and redevelopment of the site will generate added demand and attract new users to the district.
“We’ve been seeing consistently high demand for flex industrial/commercial space in a supply-constrained market,” Bauer, principal of BASH Capital, said in the release. “Reflecting these dynamics, these three properties have been experiencing strong pre-leasing interest and activity.
The partnership plans to renovate the properties and increase cash flow by keeping existing tenants in place, while leveraging local relationships to relocate and attract new tenants.