M&T Bank has provided $28.8m in financing for the purchase, renovation and probable expansion of a 21-building, 372,000 sq ft office and flex warehouse portfolio in Pittsburgh, Pennsylvania.
Burns & Scalo Real Estate Services, headed by James Scalo and considered the largest owner/operator of flex warehouse real estate in Pennsylvania, paid $33m for the portfolio.
A majority of the square footage — about 300,000 sq ft — is flex warehouse space, which suits light industrial warehouse uses and generally features a converted office space component.
The loan-to-value stretches above 87%, as Scalo plans significant improvements and additional development at the sites.
“These are stabilized assets that have always been well-leased, but the new owner will take them to a new level, so there is a value-add element,” Mark Popovich, a senior managing director with HFF who led the financing on behalf of Burns & Scalo, told Real Estate Capital.
The 19-building Abele Business Park features 10 acres of land available for future development; and the two-building Cedar Ridge Business Park at 200 Cedar Ridge Drive and has an additional eight acres of undeveloped land.
“He really has the economies of scale to drive that market and he is very good at putting resources into the right places to make the buildings shine,” Popovich said about Scalo.
The properties are less than 14 miles southeast of Pittsburgh’s Central Business District, directly off of a main interstate (Interstate 79) and less than 20 miles from Pittsburgh International Airport. The buildings were constructed between 1985 and 2006.
Burns & Scalo bought the properties through a court-led receivership, which Popovich said was a “long and difficult process… but [Scalo] was the logical buyer due to their strong qualifications and experience in the office/flex market.”