Alterra Lands $120M for Philadelphia Mixed-Use Project

The loan will be used in the construction of a 410-unit development near the Center City neighborhood.
Rendering of 510 N. Broad St. Image courtesy of Lionheart Strategic Management

Alterra Property Group has landed a $120 million loan to build a mixed-use project near downtown Philadelphia, Pa., marking the firm’s third residential development to use modular construction in the city.

The Philadelphia-based development firm secured the financing through Bank OZK, which provided $107.5 million as the senior lender and Lionheart Strategic Management, which provided $12.5 million in mezzanine financing.

Alterra was represented in the financing deal by Kelly Gaines and Chad Orcutt of JLL.

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Located at 510 N. Broad St., the mixed-use project will include 410 residential units as well as retail and commercial space. According to Alterra, an unnamed national grocery chain has pre-leased a portion of the retail space at the property.

Alterra is planning to build the $179 million development using modular construction techniques, a method the firm previously used in its construction of 4125 Chestnut St. and 4233 Chestnut St., apartment communities located in the University City neighborhood of Philadelphia.

Completed in 2019, the 141-unit community located at 4125 Chestnut St., dubbed The LVL 4125, is a six-story property that houses a mix of studio, one- and two-bedroom units averaging 435 square feet in size, according to Yardi Matrix data. The other community, 4233 Chestnut St., is still in the predevelopment phase and is expected to have 287 units and be categorized as student housing.

Despite COVID-19-related lockdown restrictions, Philadelphia’s multifamily sector has seen some notable activity recently. Last month, developer LCOR broke ground on a 304-unit upscale apartment community in suburban Philadelphia that is slated for completion in the early fall of 2022, while GMH Capital launched construction on its 225-unit project The Pendleton at Malvern. On the investment side, Tryko Partners expanded its Metro Philly portfolio with the acquisition of a two-property skilled nursing and personal care campus in Springfield, Pa.