In March 2001, Advanta Corp. sold Advanta Mortgage Corp.('Advanta') to Chase Manhattan Mortgage ('Chase'). Chase signed a two-year lease for Advanta's headquarters. 800 & 850 Ridgeview Drive, 200,000 SF Class "A" office buildings which were developed in 1998 by Advanta. In December 2002, Chase decided to vacate the buildings in April 2003. Advanta wished to sell the portfolio, but the two vacant buildings could not reach Advanta's investment in the buildings. To enhance the value, Advanta was planning on consolidating different locations, including a large call center into 800 Ridgeview Drive. The different departments' uses were not ideal for the 100,000 SF multi-story office building.
Trinity Capital Advisors, LLC ('TCA') was aware of Advanta's concerns regarding the sale of their buildings. TCA arranged a meeting with Johnson & Johnson ('J&J'). Centocor, Inc., a J&J company, was searching for a 200,000 SF corporate headquarters with expansion capabilities which could be met by the thirty-acres of vacant ground adjacent to the buildings. The vacant buildings were ideal for Centocor's aggressive occupancy schedule. TCA assisted Advanta in the negotiation of the portfolio sale to Centocor Inc. In May 2003, Advanta completed the $31.5 million sale of the portfolio to Centocor.
Advanta was able to turn a projected multi-million dollar loss into a modest gain. TCA assisted Advanta in the leasing of 700 Dresher Road, a 110,000 SF office building which was better suited for Advanta's projected uses. The flexibility of the facility and the underlying deal structure has significant advantages as Advanta continues to expand. Also, the value of the Lease was considerably less than Advanta would have paid in the 800 Ridgeview Drive building.
The Challenge
