Pearlmark closes $40 million mezzanine loan

According to Pearlmark Real Estate Partners, L.L.C., it has closed on a $40 million mezzanine loan on Moffett Towers II, consisting of three existing class A office buildings totaling 683,000 s/f. Plans for the project include the development of a fourth building for 357,000 s/f and expansion of an existing parking garage. The property is the second phase of an overall 2.1 million s/f office/R&D campus that includes a 48,000 s/f shared amenity building. The overall development is 52 acres located in the submarket of the Silicon Valley, adjacent to the Moffett Airfield. Hewlett-Packard recently executed an 11-year lease on 60% of the existing net rentable area. This investment was made on behalf of Pearlmark Mezzanine Realty Partners III, L.L.C., a fully-discretionary investment fund with $427 million in capital commitments. The borrower, Jay Paul Co., is the developer and manager of Moffett Towers. US Bank and three participants, including Wells Fargo, Bank of America, and JP Morgan Chase, also provided a total senior loan commitment of $284.2 million in the refinancing. Bill Swackhamer, managing director of Pearlmark Real Estate Partners, arranged the transaction. Swackhamer said, "This transaction is an attractive investment due to the high-end nature of the development, attractive market fundamentals, its credit tenancy and strong sponsorship with significant cash equity in place. We have enjoyed working with Jay Paul to complete this transaction and look forward to doing more business with this top-flight development organization." Pearlmark Real Estate Partners' managing director Thomas McCahill said, "Having a prior relationship with Jay Paul, as well as the senior lenders, enabled us to move quickly and structure our transaction to work effectively for all parties." Chicago-based Pearlmark Real Estate Partners is a principal-oriented, private equity real estate investment firm that pursues domestic, value-added investment strategies through a series of institutional equity fund vehicles. Since its inception in 1996, the firm has made more than 480 office, industrial, retail, multifamily, and mezzanine loan investments nationwide representing a gross investment of over $11 billion. The current portfolio includes 37 office buildings, 7 retail properties and two industrial assets totaling over 23.1 million s/f, as well as 15 multifamily assets with approximately 4,100 units and 24 mezzanine or preferred equity investments. Pearlmark and its partners, including insurance companies, public and private pension funds, foundations and endowments, banks, corporations, and high net worth individuals and families, have committed nearly $4 billion of equity capital to the firm's investment activities. The company currently employs 60 professionals and is based in Chicago with offices in Denver, Los Angeles, and New York City.