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PHILADELPHIA-Jacob Weinreb of New York City-based Weinreb Realty has acquired 1500 Spring Garden St., the 1.1-million-sf former Smith Kline pharmaceutical plant that was converted into a class A, high-tech office building by Amerimar Enterprises. Amerimar will continue to manage the property. Calls to Amerimar were not returned by deadline.

However, Michael Campbell, partner of Carlton Advisory Services in New York City, confirms the details of the transaction. Campbell; Carlton’s chairman, Howard Michaels; and associate Damien Wilson closed on $35 million in mezzanine financing for the acquisition. Carlton accessed “a major hedge fund” to provide the mezzanine financing for its client’s acquisition, according to Campbell.

The mezzanine loan is junior to a first mortgage from an unidentified regional bank. “The total capitalization is around $210 million,” Campbell tells GlobeSt.com. It includes a $140-million first mortgage and $35 million in equity in addition to Carlton’s mezzanine loan.

“Carlton’s efforts provided the borrower with 83% of the capital required to consummate the transaction, a notable achievement in this capital constrained environment,” he notes. “The financing was obtained for the acquisition, including tenant improvements and leasing costs,” he says. “The capital stack includes generous tenant improvement, leasing and interest reserves, which will be used to stabilize the property.” It is currently just 65% occupied.

“The total financing is short term, three years with some extensions if necessary –enough time to lease it up,” he says. The mezzanine loan is secured by partnership interests, and, without disclosing the rate, he says, “[it] is not that high, considering it’s only an 83% LTC [loan-to-cost ratio].”

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