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LINWOOD, NJ-A $34.7 million floating rate refinancing package will cover construction and redevelopment debt associated with Cornerstone Commerce Center, a 230,000-sf mixed-use redevelopment project here. The project is being done by an affiliate of Karman Development Group, which itself is an affiliate of the Mt. Royal, NJ-based Karman Communities Corp.

“The loan replaces the project’s outstanding debt,” says Robert J. Krawiecki of the Philadelphia office of LJ Melody & Co., who secured the funding from IXIS Real Estate Capital Inc., formerly CDC Mortgage Capital. “It provides lease and capital cost funding to cover debt service as the property leases to a stabilized occupancy level.”

Cornerstone is the reincarnation of a 45-year-old former Prudential Insurance Co. operations center in this metro Atlantic City community. Pru vacated the premises in 1999, Karman bought it and its 24-acre site in 2002 and began sitework for turning the asset into a mixed-use office/retail project early last year.

The redevelopment, which carries an announced price tag of $24 million, included gutting the building to its primary structure and completely reconstructing it. The final site plan adds up to a total of 130,000 sf of class A office space, a 60,000-sf retail component called the Shoppes at Cornerstone and a 10,000-sf retail pad site. The remaining 30,000 sf is common area space.

Combined, the office and retail space has reached the 85% leased mark, according to Robin Karman, a principal of Karman Development Group. Office tenants include the headquarters of Ivy League Mortgage, Premier Education Group,; the Atlantic City Women’s Center, the Federal Aviation Administration, and Flight Explorer, an Internet-based, real-time global flight tracking provider.

On the retail side, Andrew Geller Shoes is opening a 2,500-sf store this month, joining an 18,000-sf, 250-seat Savaradio’s restaurant, Mainland Fitness, Perkfection Coffee House and others. The center was also the first project to obtain financing under the New Jersey EDA’s new Smart Growth Predevelopment Loan Fund. The EDA made the Smart Growth loan of $1 million for two years at an initial interest rate of 3%.

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