KKR Closes Two Loans Totaling $379M for Philly, Boston Office Properties
By Cathy Cunningham June 20, 2018 11:05 amreprints
KKR Real Estate Finance Trust (KREF) has closed two floating-rate senior loans totaling $379 million on Class-B+ office properties in Philadelphia and Boston, the company announced.
“These two transactions are consistent with our strategy of lending in major markets to well-capitalized sponsors,” said Chris Lee, co-CEO of KREF.
A $213.7 million floating-rate senior loan was provided to Related Beal for its $276 million acquisition of 451 D street, a nine-story mixed-use building in Boston’s happening Seaport District. The loan has a three-year term with two one-year extension options, carries a coupon of LIBOR plus 2.4 percent and has an appraised loan-to-value (LTV) of 69 percent. The debt was arranged by Eastdil Secured.
The 85 percent-leased property includes 477,000 square feet of office and lab space and recently underwent a lobby renovation. Its amenities include a 20,000-square-foot child care center and a 3,000-square-foot fitness center. Boston-based Related Beal previously owned the property, acquiring it in 2006 before selling it to Shorenstein Properties in 2012. The company now plans to convert some vacant office space to labs in order to attract lab tenants, according to the Boston Business Journal.
KREF also closed a $165 million floating-rate senior loan for 1635 Market Street and 1835 Market Street in Philadelphia on behalf of Nightingale Properties. The loan has a two-year term with three one-year extension options, carries a coupon of LIBOR + 2.45 percent and has a LTV of 71 percent.
Formerly known as 11 Penn Center, 1835 Market Street is a 29-story office and retail building with an additional three-level, subterranean parking garage. Its tenants include Klehr Harrison Harvey Branzburg, Fannie Mae and TIAA-CREF. Two blocks away, 1635 Market Street is a 19-story office and retail building whose tenants include law firms Spector, Gadon and Rosen and Caesar, Rivise, Bernstein, Cohen & Pokotilow.
KREF originated $1.5 billion of loans in 2017 and it looks as though that figure will easily be surpassed this year.
“Year to date, we have originated more than $1.1 billion of senior loans, bringing our total originations for the last twelve months ended June 15, 2018 to $2.1 billion of senior loans, a 109 percent increase over the corresponding period in 2017,” Matt Salem, co-CEO of KREF, said in prepared remarks.
Officials at Related Beal and Nightingale Properties could not immediately be reached for comment.