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$7.5 Million in Mezz Debt Clears Way for Redevelopment of Robert Morris Building in Philly

$7.5 Million in Mezz Debt Clears Way for Redevelopment of Robert Morris Building in Philly

Federal Capital Partners (FCP) has provided $7.5 million in mezzanine debt to 1701 Arch Partners LLC to fund the transformation of the 14-story Robert Morris Building at 1701 Arch Street into 111 luxury apartments in downtown Philadelphia. The investment marks FCP’s first investment in the Philadelphia market.

Walker & Dunlop procured a $16 million dollar senior construction loan from PNC for the project. PNC also made a $7.4 million historic tax credit equity investment in the venture.

The landmark Robert Morris Building is flanked by Comcast’s recently completed headquarters and the Bell Atlantic Tower. Constructed in 1914, the landmark tower originally served as an office building and subsequently as a hotel.

The building has been slated for redevelopment since 1701 Arch Partners LLC purchased and gutted the building in July 2007. Plans for redevelopment include renovating the retail streetscape, reconditioning the terracotta façade and replacing windows.

The building’s interior will be completely rebuilt to include 111 luxury apartments, a media center, an exercise room and other Class-A tenant amenities.

FCP will oversee the renovation and management of the asset. Washington, D.C.-based TPSi will serve as the construction manager.

“FCP is aggressively pursuing debt, mezzanine and equity investments in the Philadelphia region,” says Lacy Rice, a managing partner with FCP. “We are excited about the opportunity to work with Philadelphia-based 806 Capital [a real estate investment and development company] to transform the majestic but long-neglected Robert Morris Building into one of downtown Philadelphia’s premier boutique apartment residences.”

Federal Capital Partners (FCP) is a privately held real estate investment company based in Washington, D.C. that has acquired interests in more than $2 billion in assets since 2003. FCP invests in residential and commercial assets throughout the Mid-Atlantic region.

Over the past two years, FCP has been one of the most active investors in the Washington region, amassing more than $1 billion in real estate assets.

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