(Bloomberg) -- Real estate developer Post Brothers landed a $312 million refinancing for a major apartment building in Philadelphia.
Societe Generale SA and Rockwood Capital financed the new loan for the first phase of Piazza Alta, a residential building with 695 apartments, Post Brothers said in a statement Friday. The building has fully leased those units, and 37,000 square feet (3,400 square meters) of retail space, within 15 months after its opening, the company said.
In the second phase of the project, 436 units will be built on top of existing “podium” structures that have retail space and amenities already, according to the company.
Refinancings for commercial real estate have been closely watched after the surge in borrowing costs that started in 2022 pressured prices. Apartment-building values were down 16% in August from a year earlier, according to real estate analytics firm Green Street. Lenders have also pulled back due to turmoil in the banking sector and concerns over property valuations.
Certain properties in key metropolitan areas have been able to land financing despite the challenging conditions. Earlier this year, SL Green Realty Corp. obtained a loan from Credit Agricole SA and a unit of Aareal Bank AG for a Manhattan office tower. Boston’s One Lincoln Street was refinanced by lenders including MSD Partners in September 2022.
“The exceptionality of the financing is a direct reflection of the exceptionality of the property,” Post Brothers co-founders Mike and Matt Pestronk said in the statement.
Apartment rents across the US have been easing slightly. The median rent in Philadelphia was down 1% in September from a month earlier, according to data from Apartment List. In the first nine months of the year, rents rose 3%, slower than the 5.5% gain during the same period in 2022.
The Piazza Alta building drew interest from renters including older millennials commuting to New Jersey, according to Matt Pestronk.
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