Jay Paul Co. Borrows $40M for 683,000-SF Towers

FINANCING

SUNNYVALE, CA-Chicago-based Pearlmark Real Estate Partners LLC, has closed a $40 million mezzanine loan on Moffett Towers II here, consisting of three existing class-A office buildings totaling 683,000 square feet. Plans for the project include the development of a fourth building for 357,000 square feet and expansion of an existing parking garage. The property is the second phase of an overall 2.1-million-square-foot office/R&D campus that includes a 48,000-square-foot shared amenity building. The overall development spans 52 acres located in the Sunnyvale submarket of the Silicon Valley, adjacent to the Moffett Airfield. Hewlett-Packard recently executed an 11-year lease on approximately 60% of the existing net rentable area, with occupancy scheduled to commence in April 2012. This investment was made on behalf of Pearlmark Mezzanine Realty Partners III LLC, a fully-discretionary investment fund with $427 million in capital commitments. The borrower, Jay Paul Co., is the developer and manager of Moffett Towers.  US Bank and three participants, including Wells Fargo, Bank of America, and JP Morgan Chase, also provided a total senior loan commitment of $284.2 million in the refinancing. Bill Swackhamer, managing director of Pearlmark Real Estate Partners, arranged the transaction. Swackhamer says that the investment was attractive “due to the high-end nature of the development, attractive market fundamentals, its credit tenancy and strong sponsorship with significant cash equity i