Thomas Properties Obtains $130M Refi on One Commerce Square

PHILADELPHIA-Los Angeles-based Thomas Properties Group secured a $130-million mortgage on One Commerce Square, the 41-story office building at 1835 Market St. This loan, obtained from Greenwich Capital Financial Products Inc., has a fixed interest rate of 5.67% and matures on Jan. 6, 2016.

The financing is interest only for the first five years. After that, principal and interest payments are due based on a 30-year amortization schedule.

In connection with this mortgage, for defeasance costs of approximately $4.8 million, the company defeased its existing mortgage on the 1.8-million-sf office complex. That loan had an outstanding principal and accrued interest balance of $72.5 million. It was to mature on April 11, 2028 and the current interest rate was 7%. According to an SEC filing, the loan was with Goldman Sachs Mortgage Co.

James A. Thomas, chairman and CEO, says the financing provide the firm with "low cost capital to deploy into advancing our company's long-term strategic business programs, such as additional commercial property acquisitions in our target markets." One of those targets is Houston, a market TPG, in joint venture with CalSTRS, entered in August 2005 with a $280.5-million acquisition of a four building, 2.5-million-sf office portfolio from Chicago-based Equity Office Properties. At the time, John Sischo, EVP of TGP, said it would invest $30 million to renovate and reposition those assets.

Today, also in partnership with CalSTRS, TGP closed on a 6.3-acre development site adjacent to 2500 City West, one of the four Houston properties. It paid Equity Office $6.7 million for the land. In a statement, TPG said the parcel "is ideally situated to take advantage of the dynamic retail environment in [this Houston] submarket and that it "will explore development or other alternatives as market conditions warrant." A call to TGP was not returned by deadline.

Expanded development in Philadelphia is also among TGP's plans. In November 2005, in joint venture with locally based P&A Associates, it unveiled plans for the $165-million, 42-story Murano residential condominium at 2101 Market St. At that time, Randolph Scott, who heads TGP's office here, told GlobeSt.com the company viewed Murano as a "third step" in development along W. Market Street. In addition to One Commerce Square, the company owns the office building at 1835 Market St. Asked if a fourth step was planned, Scott said, "there's nothing to write about yet." "Although we will wait to access market conditions, retail development is among the considerations for the land," a TPG spokeswoman confirms.