Dealmaker: Thorofare Capital Lends $27M for New Jersey Office Park

Thorofare Capital, Los Angeles, provided Vision Properties and The Birch Group $27.1 million to acquire, improve and lease up a Morristown, N.J. office campus.

Mount Kemble Corporate Center at 350 and 360 Mount Kemble Avenue secures the loan. The 229,685-square-foot property includes two three-story Class A office buildings two miles south of downtown Morristown. With more than 12 million square feet of inventory, Morristown is one of northern New Jersey’s largest office submarkets.

The property dates to 1999 and was 81 percent leased at closing to tenants in the legal, accounting, finance/real estate and medical/pharmaceutical industries. Anchor tenants include Coughlin Duffy LLP, Avaya and Artech.

Thorofare supplied a floating-rate mortgage through its private debt platform. It came with a three-year initial term with two one-year extension options. The structure included future funding for planned capital expenditures and tenant improvement/leasing commissions, no amortization for the first three years and a competitive spread over the one-month LIBOR index.

“We were attracted to opportunity given the local expertise and hands-on management capabilities of Vision Group, combined with the balance of ample existing cash flow, minimal near-term rollover risk and additional upside through leasing of nearly 40,000 square feet in this high-quality asset,” said Thorofare Capital Head of Origination Felix Gutnikov.

Gutnikov said the firm would like to grow its loan portfolio with similar deals where experienced sponsors are executing value-add business plans for well-located transitional properties.

Thorofare Capital also provided a $28 million medium-term loan to refinance a 250-room Doubletree by Hilton hotel in Atlanta. The loan included an earn-out provision that will increase funding subject to the borrower meeting certain milestones.

The non-recourse loan equaled 70 percent of the full-service hotel’s value.