3650 REIT has closed a financing transaction for Patewood Corporate Center, an approximately 447,000-square-foot office complex in Greenville, S.C. The commercial real estate lender originated a $68.5 million first-mortgage loan on behalf of the property owner, JFR Global Investments, which utilized the proceeds to refinance the Class A asset.
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Patewood has been under JFR’s ownership since 2017, when the commercial real estate investment company acquired the property, then known as Office Park Patewood, from Garrison Investment Group. At the time, JFR had obtained a $51 million mortgage on the property through TH Commercial Mortgage LLC, according to Greenville County records.
Located along the I-385 corridor, Patewood consists of six office buildings carrying the addresses of 10 and 30 Patewood Drive and 50 and 80 International Drive. The complex of low-rise structures, built between 1985 and 2000, has maintained its luster over the years through a series of renovations, including over $5 million in upgrades under the previous ownership.
3650 provided JFR Global with a fixed-rate, 84-month loan originated through its Stable Cash Flow investment platform. Walker & Dunlop’s Joe Hercenberg arranged the financing on the borrower’s behalf.
Good risk in a pandemic-sensitive sector
3650 was drawn to the Patewood opportunity by the property’s strong sponsorship and its desirable suburban location, which as Toby Cobb, managing partner with 3650 REIT, notes in a prepared statement, puts it at a notable advantage over office assets in Greenville’s urban core as employees continue to return to the workplace with flexible schedules amid the vaccination period of the pandemic era.
Suburban Greenville’s Class A office vacancy rate in the first quarter was just 8.4 percent, according to a report by CBRE. And unlike many other office markets across the U.S., metropolitan Greenville is faring relatively well during the pandemic fallout, having recorded 12 consecutive quarters of positive net absorption.
“Steady demand, declining sublease availability and new job announcements demonstrate the market’s resiliency a year into the COVID-19 pandemic and economic setbacks that followed,” according to the first quarter 2021 CBRE report. “As vaccines become more readily available to the public and employees return to the workplace, the Greenville-Spartanburg region will continue to rank high for future investment activity, occupiers and residents in the Southeast.”