NEWARK, DE-Surprisingly, given its stronghold in Philadelphia, BPG Properties Ltd. has never been active in the Delaware market. That has changed with the private equity real estate fund manager’s acquisition of two office buildings here for $14 million, from Northtowne Inc.

Joe Hill, Robert Yoshimura and Brian Fiumara of the Flynn Co. represented the seller. BPG was represented in house by Roy Perry, George Haines and Peter Derrico.

Typically, this would be almost too small of a transaction for BPG to consider, Derrico tells “Our bare minimum is $10 million. But we are looking at this deal not only as a way to make money but as an entry point into the Delaware market to identify further opportunities.”

This transaction also closes out the BPG Investment Partnership VII LP, a private equity fund with total equity commitments of $550 million.

Fund VIII, according to Derrico, has equity commitments of $850 million. With a 65% LTV leverage, it gives the firm upwards of $2 billion in purchasing power. Derrico says BPG does not have hard allocations for geographic investments. But a portion of the new fund, which should launch sometime in the summer, will be invested in Delaware, he says.

Its new acquisition will provide the company with a solid footing to make the jump to other investments, he adds. Totaling 142,695 sf, and only 77% leased, 242 and 248 Chapman Rd. were acquired below replacement cost. Tenants include BE&K Engineering and EDS.

242 Chapman Rd. is a three-story, 65,697-sf office building. 248 Chapman Rd. is a two-story, 76,728-sf property. They are located less than one mile from the intersection of Route 273 and Interstate 95 in the South New Castle County submarket.

Besides a stepped up leasing initiative–currently there is approximately 35,000 sf of space available at 248 Chapman Rd.–BPG is also investing $1 million in capital improvements to renovate the common areas including the entrance lobbies and restrooms.

BPG Management Co. LP will be the property manager. Dan Reeder, John Kaczowka and Brian Hopkins of CB Richard Ellis’ Wilmington office have been named leasing agents for the property.

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