East Coast Players Joint Venture on Philadelphia Project

PHILADELPHIA-Leggat McCall Properties has brought in a new joint venture partner for its project at 4 Penn Center in Downtown Philadelphia, GlobeSt.com has learned from insider sources. Multi-Employer Development Partners LP has invested an undisclosed amount estimated to be worth $75 to $80 million.

Leggat acquired the vacant 520,000-sf office building last December with plans to give it a first-class rehabilitation, lease it up and ultimately sell it. Leggat expects a 16% to 20% return, sources familiar with the deal say. Until then, Leggat will seek top class A rents, about $27 per sf, and hopes to move a tenant in by August 2001.

The renovation, which involves asbestos removal, began last month and is expected to be finished next July. One requirement of the deal is that union members do the work, one source says.

MEDP is a commingled fund formed by six union pension funds, one private equity fund and the general partner, which manages it. That partner consists of lead manager Chadwick-Saylor Capital Management Inc., Kennedy Associates Real Estate Counsel Inc. and Landon Butler & Co.

The fund has $212.1 million in equity funding, which the investors expect to leverage for development projects worth about $750 million.

The Philadelphia joint venture is MEDP’s fourth closing in five months, according to one source. Another joint venture is a project with Avalon Bay Communities in New Rochelle valued at $92 million.

Leggat officials would not say why it sought a partner.