Citizens Bank is providing $36.4m of three-year, floating-rate financing to Kairos Real Estate Partners and Artemis Real Estate Partners for the recapitalization of the Fort Washington Executive Center in Philadelphia, Pennsylvania.
The deal includes a $22.1m bridge loan and $14.3m of future funding for the three-building, 400,000 sq ft, Class A office complex.
Loan proceeds will be used to recapitalize the project with a first mortgage and fund future capital improvements and leasing costs. The loan carries two one-year extension options.
The borrowers purchased the property all cash in December for a reported $30m from CWCapital Asset Management. It was the second joint venture between Kairos and Artemis after acquiring and repositioning the 176,000 sq ft Triad office building located in the King of Prussia region of Pennsylvania in 2013.
Fort Washington Executive Center is comprised of three buildings at 600, 601 and 602 Office Center Drive in Fort Washington, about 20 miles northwest of Center City Philadelphia. The property is 79% leased to tenants including Nutrisystem (corporate headquarters), AstraZeneca, McNeil, AmeriHealth and, most recently, Allstate, which signed a 25,000 sq ft lease prior to the loan closing.
Originally built in 1988, the property will undergo renovations to its common areas, restrooms, amenities (cafeteria and fitness center), conference and training facility, and landscaping.
“These assets fit with our strategy of acquiring well-located assets, and upgrading them with amenities and infrastructure designed to meet the needs of today’s tenants,” said Stephen Gleason, president of Kairos Real Estate Partners.
HFF arranged the financing.