PHILADELPHIA-Locally based Resource Real Estate, in a joint venture with a Northeast-based private hedge fund, purchased the whole mortgage loan for the School Lane House Apartments here. Mark Thomson and Zachary Pierce of Marcus & Millichap Real Estate Investment Services represented the seller, a regional northeast bank. Pierce points out that the buy was not a note sale, the buyer took the lender’s position and finished out the foreclosure process taking over control of the 506-unit apartment property for $30 million.
The original lender, which was undisclosed, had been marketing the property and had gotten some hints of offers in the low-to-mid-$20-million range, when they handed the assignment over to Marcus & Millichap. Thomson and Pierce tell GlobeSt.com that “exposing the asset in a more disciplined way” helped to generate higher bids for the property. There were some restrictions, as per the bank.
Marcus & Millichap was given 30 days to close the deal, due diligence from bidders had to be done upfront, a 10% nonrefundable deposit was required from bidders and the deal needed to close by June so the bank could get the property off its books by the end of the quarter. The winning bid from the Resource Real Estate joint venture closed in two weeks with an all-cash purchase of $30 million.
The team notes that they conducted 27 property tours, which produced 16 offers. The occupancy was at 88% and rents were roughly 15-20% below market rates and the asset at 5450 Wissahickon Ave. is in good structural condition, although the residences were outdated. The buyer is said to be putting a “substantial” sum to reposition the asset. Twelve of the units are retail and the property spans 338,546 square feet over two 11-story buildings.
The borrower and the lender in the deal were undisclosed, however according to Real Capital Analytics the last transaction of 5450 Wissahickon Ave. was in January 2006 when SLH Owner LP purchased the property in for $40 million from National Church Residences of Delmont, PA with financing from New York Community Bank. GlobeSt.com could not confirm whether or not these were the borrower and lender involved in the foreclosure.
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