Thursday, March 4, 2010

Behringer Harvard Takes Control of 1650 Arch thru Loan Purchase

Behringer Harvard purchased the first mortgage secured by 1650 Arch Street, a 553,349-square foot, 27-story office tower in Center City Philadelphia.

Behringer Harvard did not provide details of the transaction. The original loan was held in a CMBS trust and had a balance as of Jan. 31 of $42.77 million and carried an interest rate of 6.43%. The loan is scheduled to mature in August 2012.

"This investment demonstrates our continued commitment to the Philadelphia market, and to 1650 Arch Street," said Deidre Hardister, vice president of asset management for Behringer Harvard. "Since the departure of WolfBlock, the debt structure secured by 1650 Arch Street has presented challenges. Now that a Behringer Harvard entity controls the senior debt, we have the flexibility required to upgrade the property and invest capital to lease the vacant space."

Hardister was referring to tenant WolfBlock LLP voting to dissolve and cease its law practice. WolfBlock occupied more than 144,000 square feet.

"We plan to make significant capital improvements to 1650 Arch Street this year, including lobby and exterior renovations and upgrades to the elevator and mechanical systems," Hardister said. "The property has available for lease approximately 176,000 contiguous square feet of office space."

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