Brendan Mullinix of Lexington declined to disclose either the proportion of the JV's stake in the building or Lexington's proportion of the partnership with Pitcairn, but did confirm that Lexington is the majority owner of the partnership. He tells GlobeSt.com that Lexington represented itself on the buyer side of the transaction, but declines to identify the seller. Joseph Fox, Pitcairn's EVP of investment, is equally mum regarding the seller and the proportions of ownership.

Glenn Whitmore, senior managing director of the New York City office of Holliday Fenoglio Fowler, confirmed to GlobeSt.com that he and Andrew Scandalios, managing director of the same HFF office, represented the seller in the transaction, but also declines to identify the seller, citing a confidentiality agreement. However, in mid-April 2004, both men told GlobeSt.com they had been retained by Morgan Stanley to market the property.

Six Penn is a 19-story building on a 1.2-acre Center City site and has an aggregate of approximately 322,317 sf, including ground-floor retail and four levels of structured parking. The building was completed in the 1950s as part of the multi-building Penn Center complex and is substantially leased to Morgan Lewis & Bockius through Jan. 31, 2014. Scandalios previously told GlobeSt.com the building had been "fully redeveloped" for its current tenant during 1998 and 1999.

In connection with the acquisition, the Lexington/Pitcairn JV obtained non-recourse first-mortgage financing of approximately $49 million. The loan bears a 5.06% fixed rate of interest and matures in July 2014. In a separate transaction, Lexington has obtained a $200-million unsecured revolving credit facility, which replaces its existing $100-million credit facility, and matures in June 2008 with a one-year extension option. The new facility bears interest at a rate of 120 to 170 basis points over Libor, depending on the company's overall level of indebtedness. Borrowings on the previous facility were at between 150 and 250 basis point over Libor, depending on the number of properties Lexington owned free and clear of mortgage debt.

Six Penn represents Lexington's first foray into Philadelphia, Mullinix says. Once a major player in Center City, Pitcairn, which developed Bell Atlantic Tower, 2000 Market St., 1760 Market St. and 1800 JFK Blvd., exited the market for 10 years. It re-entered in July 2004 with the acquisition of Pennsylvania House, a multifamily property at 1500 Chestnut St. At that time, Fox said Pennsylvania House was "an initial step to demonstrate our confidence in the Philadelphia Real Estate market." Asked now if the company plans more acquisitions in Center City, he says, "We do. We like Philadelphia very much," and adds the company is interested in both office and multifamily assets here.

Instant Insights /

GlobeSt.com UPDATE: JV Takes $59M Stake in Six Penn Center

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