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PHILADELPHIA-The Tower Investments Inc. affiliate that developed the Edge at Avenue North has obtained a $60.8-million fixed-rate permanent loan from Chicago-based LaSalle Bank. The mixed-use project's new funding replaces a floating-rate construction loan of the same amount and reduces the interest rate by nearly 250 basis points.
The 12-story, 1,200-bed student-housing complex at 1601 N. 15th St. includes a 100,000-sf structure that contains retail, a restaurant and seven-screen movie theater. Locally based Tower, headed by Bart Blatstein, this month delivered the project at 100% occupancy, kicking in the pre-arranged permanent mortgage at a locked rate.
Locally based Remington Financial Group Inc. arranged the initial loan and the refinance. New York City-based Amalgamated Bank provided the construction loan 16 months ago from its LongView Ultra Construction Loan Investment Fund. "Both fundings were based on an 80% loan-to-value ratio," says Matthew McManus, Remington's president. He and Kris Wood, senior director of Remington, structured the financings and led the negotiations on behalf of Blatstein. They worked with Chris Kosonen of LaSalle on the refi.
"The 10-year permanent financing at 30-year amortization was entered into with LaSalle 14 months ago," McManus tells GlobeSt.com. "At that time, on a hunch that rates would start to go up, Blatstein elected to lock the rate and the lender agreed." Rates have since fluctuated. Without disclosing the interest rate of the new permanent loan, McManus says it's "about 50 to 60 basis points" lower than today's rate.
"Construction loans are usually based on a loan-to-cost ratio," McManus adds. "Ours was loan-to-value. We had the completed project reappraised and, because of Tower's quick lease-up at somewhat better-than-anticipated rents, the value estimate was right on the money."
The Edge at Avenue North is adjacent to Temple University. The university's ongoing expansion, which includes a $75-million Tyler School arts facility and a $78-million building for the Fox School of Business, has led to significant revitalization of the North Philadelphia neighborhood.
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