By Mihaela Coste
Natixis, a subsidiary of Groupe BPCE, originated a floating-rate financing in the amount of $54.5 million on behalf of Sun Equity Partners for the redevelopment of the former Cheltenham Square Mall, located in Philadelphia.
Eli Breiner and Jerry Boxer from ECB Capital Group secured the financing, which consists of a $42 million senior loan and a $12.5 million mezzanine loan. Initial loan proceeds of $16.9 million were used to retire the existing property financing and an additional $40.1 million is earmarked for the redevelopment and future leasing at the property.
Located at 2385 West Cheltenham Ave., approximately eight miles north of the city’s CBD, the asset benefits from a traffic count of more than 72,800 vehicles per day in an area where the average annual income is $62,000. Sun Equity Partners plans a major face-lift and will rebrand the 429,617-square-foot property as Greenleaf at Cheltenham.
The asset is currently 60 percent leased and pre-leased to a variety of national tenants, including Home Depot, Marshalls, LA Fitness, TD Bank, Wells Fargo, T-Mobile, Chick-Fil-A and Wendy’s. The property is shadow-anchored by Target, Shop Rite and Burlington Coat Factory.
Sun Equity acquired Cheltenham Square Mall in 2015 from Thor Equities for $28.6 million and funded its acquisition with a $26.4 million financing from Ladder Capital Finance. The company’s primary focus is directed toward the acquisition and redevelopment of properties featured in key metropolitan markets or urban housing projects and on other markets ranging from emergent to deluxe. Sun Equity currently owns and manages a portfolio of more than 10 million square feet across the U.S.
Natixis specializes in CMBS originations and also provides floating-rate structures for opportunistic property acquisition and repositionings. The company recently facilitated the first green-specific tranche in a CMBS loan to refinance New York City’s 85 Broad St.
Image courtesy of Sun Equity Partners