Parkway Lands $409M for Chubb’s Philadelphia HQ

Chubb headquarters. Rendering courtesy of JLL

Parkway Corp. has secured $409 million in credit tenant lease financing for the development of Chubb‘s new consolidated headquarters in Philadelphia’s Logan Square neighborhood.

UMB Bank, as trustee of the JLL Securities Credit Lease-Backed Pass-Through Trust, provided the fixed-rate, long-term note. JLL structured the construction-to-permanent loan on behalf of the developer.

As reported by PhillyVoice, Parkway also received $10 million in project financing from the Redevelopment Assistance Capital Program, facilitated by the Philadelphia Industrial Development Corp. Additionally, $3 million in state funds will go toward construction costs. The developer intends to break ground on the $430 million project in February, with completion expected in early 2026.

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Set to rise at 2000 Arch St., the 438,000-square-foot office building will encompass various amenities, including a 6,000-square-foot outdoor terrace on the ninth floor and two levels of underground parking. The development site is close to Logan Square’s popular destinations such as City Hall, The Franklin Institute and the Barnes Foundation, and near the Suburban Station, which offers easy access to commuter rail and subway lines throughout the city.

According to a recent CommercialEdge report, there were approximately 2.3 million square feet of office space underway in Philadelphia as of December. The metro registered a 13.7 percent vacancy rate, 2.8 percent lower than the national one.

Adding more office jobs

Chubb intends to add more than 1,250 employees at its Philadelphia office, set to become its largest in North America. The firm pledged to generate and maintain a total of 3,200 jobs in Pennsylvania within five years after the opening. According to a JLL Philadelphia CBD Office Insight from the fourth quarter of 2022, this marks a notable increase in employment in the central business district of a city where the employment rate is currently at 98 percent of what it was before the pandemic.

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The same source reveals that the upcoming development highlights the trend of businesses seeking higher-quality office spaces across all industries. Additionally, it shows Philadelphia’s ability to adapt and thrive despite changes in the way work is done, due to its vibrant atmosphere and talented workforce.

A team effort

The JLL team that worked on the financing on behalf of Parkway Corp. was led by Managing Director Austin Johnson and Senior Managing Director Bill Cavagnaro. In fact, several JLL teams worked together to finance the project, including the Agency Leasing team representing Parkway, the Tenant Rep team assisting Chubb, as well as the Project and Development Services team.

Additionally, JLL’s Structured Finance group in Atlanta, which focuses on credit tenant lease and ground lease financing, as well as other structured debt solutions for various property types, was also involved.