By Natalie Kostelni
Philadelphia Business Journal
Brandywine Realty Trust has lined up forward financing for the redevelopment of the 30th Street Post Office and Cira South garage projects in the University City neighborhood of Philadelphia.
The Radnor, Pa.-based real estate investment trust secured $209.3 million for the post office development and $46.7 million for the construction of the garage. Brandywine did not identify the lenders.
The refurbished complex will be used by the Internal Revenue Service.
The arranged financing is a significant milestone because commercial lenders continue to be hesitant to issue loans. Even though Brandywine (NYSE:BDN) managed to line up the loans, it still has to secure additional funding for the projects. As of March 31, $257.2 million in funding was needed for the $355.5 million total cost for both projects, the company said in a statement.
Brandywine got the funding from a consortium of institutional lenders but would not disclose the lenders' names.
The forward commitments are scheduled to sit in escrow beginning in June after loan documents with the lenders are finalized, and are scheduled to be released from escrow to Brandywine in August 2010, and will then become key components of the project’s long-term capital structure.
The forward commitments will provide roughly $238 million of net proceeds after transaction costs and financing fees. The 20-year, fully amortizing loans carry a fixed rate of 5.95 percent and mature in 2030, the company said.
The 30th Street Post Office is a $260.5 million historic rehabilitation of an 862,692-square-foot building that is fully leased to the IRS for 20 years. The Cira South garage project will cost $95 million and will sit across the street from the post office site. It will have parking for 1,662 vehicles and is also nearly fully leased to the IRS.
Brandywine was advised by FBR Capital Markets & Co. and by CTL Capital, which was advised by the Philadelphia law firm of Duane Morris. The law firm of DLA Piper and the accounting firm of Reznick Group also provided additional transaction advice to Brandywine.