Michael K. Pearson
bought out his partner and plans to expand his 12-year-old business,
Union Packaging L.L.C.
of Yeadon, which makes boxes for
Burger King, Wendy's
Pearson told me he wanted to hire more workers (he currently employs more than 50, down from a prerecession peak of nearly 100) and "branch out into some additional markets."
Pearson borrowed $3.5 million from National Penn Bank, based in Boyertown, to boost production and pay off his outside investor, Dopaco, a Downingtown box-maker that is in the process of being sold by owner MeadWestvaco Corp. to New Zealand's Reynolds Group Holdings Ltd.
The loan is guaranteed by the federal Small Business Administration, which last year boosted its loan limits from $2 million to $5 million as part of President Obama's attempt to jump-start stalled small-business lending by
"It's the largest SBA loan that the bank has ever done," says Pearson, who grew up in West Philly (60th and Vine Streets) and Lansdowne and graduated from that West Philly institution, the University of Pennsylvania, in 1984.
There's more in the works: "I'm doing loans like this all day long," says Marcia McGavisk, who heads the SBA program at National Penn. She says her lenders have closed $9 million in SBA loans so far this year, compared with $10 million in all of 2010, even though the SBA has begun tightening up on some loan terms.
The bank's total is still down from the $30 million-plus in SBA loans National Penn closed in 2006, before the real estate market collapse and economic slowdown. But McGavisk
hopes to more than double
SBA loans by year's end compared with last year's levels. That would bring the total loan value to near prerecession levels.
The U.S. economy is still slow. Home prices are at a nine-year low, new college graduates are moving back home with Mom and Dad, and job creation in much of corporate America is still weak.
But the small-business "loan pipeline is healthy," McGavisk insists. "We're getting expansions, acquisitions, nice activity."
Towers for sale
Apollo Global Real Estate
, of New York, hopes to raise more than $180 million from the sale of the
Public Ledger Building
overlooking Independence Mall.
That's less than the combined $220 million then-owners Citigroup and Joseph Grasso's Walnut Street Capital tried to raise in a failed attempt to sell the onetime publishing center-turned-office complex in 2008.
But it's still a lot more than the $137 million investors led by Citigroup's property division paid to buy the buildings in 2006. Apollo took over the buildings as part of a $3 billion property portfolio it bought from Citi last fall.
Last week, Apollo hired broker Jones Lang LaSalle to sell the 885,000-square-foot Curtis building and the Public Ledger Building. They are asking $150 per square foot at Curtis, with its soaring atrium and Maxfield Parrish's "The Dream Garden" stained-glass lobby mural,
and $100 per square foot for
the Public Ledger, according
to people familiar with the efforts.
The sellers are looking for investors willing to pay prices similar to two recent offers: The $145 million Brooklyn-based David Werner recently offered for 1700 Market St. (880,000 square feet plus parking garage) and Lower Merion-based Alex Schwartz's offer of more than $125 per square foot, or more than $63 million, for the 503,000-square-foot Two Penn Center (1500 JFK Blvd.), according to people familiar with the offers.
Neither of those deals has been concluded, and some deal-watchers question whether the renovated older buildings are worth about the same as the new towers farther west along Market Street.
Both Werner and Schwartz have, in the past, put together investor groups to finance Philadelphia properties.
Neither returned calls seeking comment.
Philadelphia has attracted interest from investors turned off by expensive New York and Washington real estate. But even as its affluent resident population and tourism base have increased over the last two decades, Center City has failed to attract more new business tenants than it has lost. And rents and occupancy in Center City have been nearly flat over that period.