BG Capital, FreezPak Logistics Get $73M for Philadelphia Project

Rendering of 2201 E. Allegheny Ave.

FreezPak Logistics, through their new partnership, BGFP International, has landed construction financing in the amount of $72.6 million for a new cold storage facility in Philadelphia.

The 172,000-square-foot industrial project will be occupied by the company and is funded by two lenders. BGFP International is a joint venture set up between BG Capital and FreezPak Logistics

The speculative development will be located at 2201 E. Allegheny Ave., on a 7.2-acre site, in Philadelphia’s Port Richmond neighborhood, close to Interstate 95 and Betsy Ross Bridge, 5.4 miles from downtown Philadelphia and within 14 miles of Philadelphia International Airport. The speculative project will feature controlled-temperature, 30 trailer parking spots, 20 loading docks and 60 car parking spots.

The partnership acquired the development site from Manufacturers and Traders Trust Co. in 2020 for $10 million, according to CommercialEdge. Construction has started on the development and completion is set for October 2023.

Financing details

OceanFirst Financial Corp. subsidiary, OceanFirst Bank, provided $42.5 million in construction financing as the senior lender, while Nuveen Green Capital provided $30.1 million in the form of Commercial Property Assessed Clean Energy financing, an alternative debt solution used for energy efficiency developments, with the goal of reducing the CO2-e annual footprint. While making the future cold storage building 30 percent more efficient than the state’s building energy code’s requirements, this also marks the largest C-PACE deal in Pennsylvania, said BG Capital’s Vice President Tyler Huffman, in prepared remarks.

The project’s capital investment is estimated to exceed $93 million and is expected to bring 63 new jobs to the Port Richmond and Harrowgate neighborhoods, with its Market-Frankford Line location making commuting easy for future employees. The industrial sector has good prospects going into 2023, according to CommercialEdge’s latest national industrial report.

Regarding new supply, Philadelphia has the largest construction pipeline in the Northeast, with 16.7 million square feet of industrial space under construction as of October, followed by New Jersey, Boston and Baltimore. A high-profile financing deal happened in the area: in January, Hilco Redevelopment Partners and its partners secured a $500 million financing for The Bellwether District’s redevelopment, a 15 million square-foot industrial park.