Philadelphia, PA – September 26, 2017 – Cohen Equities and Taconic Capital announced today that they have completed the acquisition of floors 3 to 6 of 801 Market Street, a historic Philadelphia CBD asset also known as the Strawbridge Building. Fully occupied by Philadelphia Media Network and the Pennsylvania Department of General Services, the 312,000 square foot asset is part of a larger 700,000 square foot office stack that the partnership assembled and refinanced pursuant to the transaction.
Cohen and Taconic purchased floors 7 to 13 of the property in November 2016 and have long since worked with the in-place owner of the retail portion of the building – a partnership between PREIT and Macerich – to structure a highly complex deal that assembled the entire office portion of the building. PREIT and Macerich are currently redeveloping floors 1 and 2, together with the subgrade space as part of Fashion District Philadelphia, a first-class development that will span 3 city blocks and feature a number of top tier retail, dining and entertainment brands. The redeveloped mall is expected to fully open as of summer 2018 and is being hailed as a transformative project for Downtown Philadelphia.
Eric Sitman, who managed the acquisition and refinancing on behalf of Taconic, emphasized how aligned the parties were in structuring and completing the transaction, saying that “Given our ownership of the upper office stack, it made perfect sense to acquire the remaining office floors due to the complementary nature of the rent roll profiles (stable versus opportunistic) and the added value in cleaning up the condominium structure. The PREIT and Macerich teams were an excellent counterparty and we’re excited to see them succeed with their Gallery redevelopment, which will be a game changer for the Market East submarket.”
Meir Cohen, Cohen Equities’ CEO, echoed the sentiment, saying that “Metro Philadelphia has been very good to us, and our experience in the market speaks volumes about the quality of people within the real estate industry there. Philadelphia has become one of our favorite places and we look forward to being a part of the community for years to come.” Cohen purchased another office asset, Oak Hill Plaza, in the King of Prussia submarket in May 2016 and intends to aggressively expand throughout the region.
The sale transaction was led by Andrew Ioannou and Joshua Schrier of PREIT, who had acquired the office floors in 2006. Ioannou, Executive Vice President, Finance & Acquisitions for PREIT said of the Cohen and Taconic teams, “This was a very complicated transaction for all involved and the Cohen and Taconic teams were great to work with to get it finalized.” He also emphasized how much the newly assembled office portion of the building should benefit from PREIT and Macerich’s redevelopment of the surrounding retail, saying “What we are bringing to the neighborhood is going to be transformative and we expect that’s going to have a very positive impact on the vitality of the office space for them.”
JLL’s Capital Markets team, led by Adam Schwartz and Jonathan Schwartz, sourced and managed the refinancing of the asset through a senior and mezzanine loan package by Deutsche Bank and Square Mile Capital. Adam Schwartz said of the financing, “This was a unique opportunity to provide a progressive package to finance the entire acquisition of the stabilized portion of an asset, while at the same time refinancing the value-add portion. It was an easy story to sell, but a very tough one to execute. Luckily, we found a lender who understood and embraced that complexity and were uniquely enabled to get to the finish line with us. It was an excellent example of what a group of sophisticated parties can accomplish in real estate when they all work towards a shared outcome, and we were honored to play a meaningful role to help bring it all together.”
Taconic and Cohen are currently completing construction on a number of newly leased spaces within the upper stack of the building, and are actively leasing a full floorplate of the building, together with several partial floor spaces. Patrick Grenko and his team at JLL act as leasing representatives for the asset and can be contacted at (215) 399-1803, firstname.lastname@example.org with regard to leasing opportunities.
About Cohen Equities
Cohen Equities is a national real estate investment firm that pursues commercial assets that present an opportunity to add value in both secondary and gateway markets. The company has successfully invested in and improved more than 9 million square feet of real estate across the United States. Led by Meir Cohen, a real estate veteran with more than 30 years of experience, Cohen Equities creates significant value through active management, leasing and repositioning activities. For more about Cohen Equities, please visit cohenequities.com.
About Taconic Capital
Taconic Capital Advisors is a global institutional investment firm founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody.
Taconic pursues an event-driven, multi-strategy investment approach dedicated to generating strong risk-adjusted returns with an emphasis on capital preservation. The firm has offices in New York, London and Hong Kong with over 40 investment professionals, including 11 principals who average 12 years of investment experience at Taconic.
Taconic’s commercial real estate business is run by James Jordan and Jon Jachman and focuses on sourcing distressed, value-add opportunities through non-traditional, off-market processes. Leveraging its diverse network of relationships with CMBS special servicers, lenders and local operating partners, Taconic seeks to generate outsized returns through the strategic repositioning and re-introduction of well-located real estate assets that have been ignored by local market participants as a result of overleveraged and unsustainable capital structures.
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $145 billion. At the end of the second quarter of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of nearly 80,000. As of June 30, 2017, LaSalle Investment Management had $57.6 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visitwww.jll.com.
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether a sale, financing, repositioning, advisory or recapitalization execution. In 2016 alone, JLL Capital Markets completed $145 billion in investment sale and debt and equity transactions globally. The firm’s Capital Markets team comprises more than 2,000 specialists, operating all over the globe.