Patriot Pays $41M for Allentown Office Campus

Patriot Equities is acquiring 1110 American Parkway, Allentown PA, a 600,000 square-foot class A office campus in Allentown, PA. The property is off Route 22 in close proximity to the Lehigh Valley International Airport.

Mission Capital Advisors says its Debt & Equity Finance Group arranged $41 million in acquisition and repositioning financing for the transaction.

The property includes two class A office buildings totaling approximately 600,000 square feet connected by a glass atrium on approximately 145 acres.  The buildings are served by two parking garages and surface parking. Another 400,000 square feet of office space, for which approvals have already been received, could be built on the property.

Patriot purchased the office campus from LSI Corporation, recently acquired by Avago Technologies, San Jose, CA. LSI retained, on a long-term basis, approximately 110,000 square feet in a portion of one of the buildings. Intel Corporation and the United Way are also tenants in the property. Intel recently acquired a business unit from Avago and Patriot was able to retain them as a tenant in the building with a new 80,000 square foot long term lease (in addition to approximately 50,000 SF they currently occupy on the campus).  Patriot is in talks with several large users for the remaining available space.

"This is the preeminent building in the Philadelphia region and was constructed to the highest standards for a large corporate user,” says Erik Kolar, Patriot's president and CEO. “Its flexible floor plates and superior amenity package will allow us to provide an unmatched facility experience to tenants in the marketplace."

“Our team was tasked with the challenge of arranging full leverage financing on a short-fuse acquisition with 40 days to close. We were also presented with a host of moving parts and unknowns, such as substantive property lease-up during the contract period, including post-lender term sheet execution prior to loan closing, which required additional negotiation and capital source flexibility,” says More. “The property itself is the top suburban office asset in Pennsylvania. The sponsor succeeded in tying it up directly off-market at a very attractive basis after 10 years of courting the seller.  Patriot Equities’institutional-quality sponsorship, along with aggressive and exemplary leasing prowess during the contract period, helped our team craft the right story needed to nearly full-leverage financing.”
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