Crosspoint at Valley Forge

Wayne, PA
SF: 272, 310 · Fund I · Sold 2015

Opportunity

In late 2010 The Davis Companies acquired a first mortgage loan in maturity default through a relationship with the lender. The loan was collateralized by two Class B office buildings in Wayne, PA totaling 272,310 RSF.

Overview

The Davis Companies was able to acquire the loan at 73% of face value and at a significant discount to replacement cost. Through a negotiated deed in lieu of foreclosure, The Davis Companies gained title to the properties. The site is very well-located, adjacent to the super regional King of Prussia Mall, with good visibility off Route 202 in one of the best suburban office markets in Philadelphia. Just prior to acquisition, the two largest tenants, occupying 89% of the property, vacated the majority of their space as a result of corporate consolidations.

Value Creation Strategy

The two large tenants vacating the site created an opportunity to re-tenant and reposition the asset. After gaining title to the property The Davis Companies proceeded to negotiate tenant lease termination payments and perform extensive capital improvements. The property improvements are now complete and the property is considered one of the premier Class A office parks in suburban Philadelphia. Additionally, in April 2015, the building received LEED Gold certification. Through successful marketing of the site, The Davis Companies leased up the large blocks of space to 95% occupied and sold the property in August 2015.