806 Capital acquires industrial building for conversion to condos

By Marita Thomas

PHILADELPHIA-New York City-based 806 Capital LLC, in partnership with Chicago-based Raideye Investments, has acquired a 37,000-sf industrial building at 1234 Hamilton St. for conversion to residential condos. The price tag was almost $3.8 million and the company is investing $2 million more for the conversion.

Leonidas Addimando, a Philadelphia native and one of the founders of the Orbitz travel website, and Jacob Gehl, a senior broker with Marcus & Millichap in New York City, are the principals of 806 Capital. The seller of the building, which is the former factory of candy-ingredient supplier Ottens Flavors, is locally based Miles and Generalis, a converter of several historic properties here. It is currently occupying part of the Hamilton Street building, which was completed in the 1920s.

The new owners plan 17 residential condo units ranging from 1,000 sf to 2,500 sf which will be offered at prices of between $300,000 and $650,000, Gehl tells GlobeSt.com. “We already have one buyer that paid over $1 million to acquire two planned units in order to create one larger one.”” The average unit size is 1,650 per sf. The developer also plans 17 indoor parking spaces, which it is selling for $35,000 each.

The project is called Live at 1234. The developers plan to complete the conversion by Memorial Day 2006 and deliver the units that summer.

Gehl describes 806 as a “start-up developer” with plans for additional investment in what he calls Philadelphia’s “loft district.” This location is north of Center City and west and south of Old City and Northern Liberties, respectively. “We’re attracted to the renaissance taking place in Philadelphia,” he says, “and we believe we can offer more square footage for the same unit prices condos are going for in other Center City markets.”

806 Leases Prime Retail to Roche Bobois

by Peter Van Allen – Philadelphia Business Journal

Kimpton Hotels & Restaurants, an owner of boutique hotels, has plans for a second location in Center City.

The hotel chain has signed an agreement to open a boutique hotel in the Robert Morris Building at 17th and Arch streets, according to the project’s developer.

“We started the project over a year ago, looking at the building. We wanted a four-star, boutique hotel the likes of which doesn’t exist in Philadelphia right now,” said Leo Addimando, a partner in the real estate development firm 806 Capital, which is based in Old City. “We picked Kimpton because we wanted a brand and we wanted them to operate it.”

The hotel will complement another Kimpton hotel planned for 17th and Sansom. Both are expected to open in late 2009.

806 Capital, along with London-based Patron Capital Ltd., purchased the Robert Morris Building in July 2007. The Robert Morris Building was built in three stages between 1914 and 1924. It is actually two attached buildings, one standing 14 stories and the other standing four, with a total of 125,000 square feet. It was named for the financier of the Revolutionary War. The original owner was the Methodist Church, which for a time operated a boarding house called the Robert Morris Hotel.

806 Capital considered at least one other possibility for the building before agreeing on the Kimpton project. At one time, it considered building student housing for the University of the Arts.

Now, Addimando has decided a hip hotel is the way to go. He hired Agroos/Lovera Architects, which recently designed Two Liberty Place Condominiums and was associate architect on Lincoln Financial Field and Citizens Bank Park. Construction will start this summer.

The developer wants the hotel to feature a destination restaurant with a name chef.

Kimpton Hotels, which is based in San Francisco, touts “one-of-a-kind” hotels, with a “distinctive energy, personality and pulse.”

At the other location in Center City, Kimpton is retrofitting the former American Institute of Architects building into a Hotel Palomar, with 234 rooms. The location will be owned and operated by Kimpton. The conversion will cost $92.5 million.

It’s not uncommon for Kimpton to have two locations in one city. Boston; Chicago; Dallas; New York; San Francisco; Seattle; Washington, D.C.; and even Portland, Ore., all have two locations or more. San Francisco has nine and Washington has seven — 10, if you include suburban Virginia.

Kimpton, which was founded in 1981 by Bill Kimpton, has 41 properties in the United States and Canada. Another 19 are planned for the next three years.

Kimpton considers itself a pioneer in adapting historic buildings into hotels. The strategy is a perfect fit with the two Philadelphia properties, each of which is 80-plus years old. Kimpton hopes to fill a need in attracting “sophisticated” travelers, including corporate, leisure and convention travelers.

Both Kimpton properties in Philadelphia are expected to have a “chef-driven” restaurant and bar, as well as meeting space.

By Solomon D. Leach – Metro Philadelphia

CENTER CITY. While the Comcast Center’s thick, glass doors opened very quietly a few months ago, some nearby businesses and developers are already noticing the skyscraper’s impact.

Just behind the city’s tallest building, development firm 806 Capital has plans with Kimpton Hotel & Restaurant Group to turn the Robert Morris Building into a boutique hotel feeding off the growing number of business travelers to Comcast’s new headquarters.

“Completion of the Comcast tower added not only direct and immediate demand generally for hotel rooms, but it really helped spark a whole regeneration of that Arch Street corridor,” said Leo Addimando, managing partner of 806 Capital.

Comcast doesn’t plan to take the proverbial red bow off the building until June, but employees have experienced the skyline views and spacious offices since the end of last year.

“If you don’t want to, you don’t have to leave the building,” said Drew Brown, an administrative services employee, speaking of the amenities, which include a supersized cafeteria.

Despite the building’s own eatery, lunch-time traffic at Corner Bakery Cafe across the street has picked up significantly, said owner Ted Delong.

Corner Bakery used to cater food for Comcast when it was housed in Center Square, but Delong said what they’ve lost in catering they’ve gained in customers.

“It’s done very well for us on the retail side,” he said

By Joseph N. DiStefano | April 29th, 2009

In an effort to create jobs, Mayor Nutter yesterday gave handouts to chosen city businesses, from money the city borrowed in bond issues under ex-Mayor Street.

City gifts

“It’s tough to be in business right now,” Nutter told the crowd. Taxpayers will ease the burden by giving a few developers, selected by the private Reinvestment Fund (TRF), low-interest “gap financing” to supplement their bank loans:

-           $1 million to Leonidas Addimando’s 1201 (Chestnut St.) Partners L.P., to convert a 15-story office building to one- and two-bedroom apartments.

-           $1 million to Grasso Holdings for 32 apartments and three retail stores at 2101 South St., pending final bank financing.

-           $670,000 to Weavers Way Cooperative Association for another store up the hill from its old Germantown location.

-           The city also spread $727,000 to help fund improvements at four cafés near the University of Pennsylvania campus (”My district’s so blessed,” West Philadelphia Councilwoman Jannie Blackwell told me), and other restaurants in Fishtown, East Falls, Manayunk, Mount Airy, Northern Liberties and Overbrook Farms. The 150-year-old Merchants Fund selected the businesses.

Separately, the Philadelphia Industrial Development Corp. said it was starting a small-business loan-guarantee fund. After the city’s big banks took a pass, tiny United Bank of Philadelphia and Valley Green Bank said they would join the “pilot phase.”

Deputy Mayor Andrew Altman said that the city had to turn down dozens more businesses that wanted money, but that there would be “another round.” Apply to the Philadelphia Commerce Department.

The Grand Skybox at 2424 Studios

Written by Chad Wright | 29.APR.09

Another First Friday is upon us and there is a plethora of awesome art galleries throughout the neighborhood to choose from.  This month’s highlight is 2424 Studios at the corner of Gaul and York streets in Fishtown.  2424 will be celebrating their first, First Friday with an opening reception from 5PM to 9PM.

Jessica Ruck, the leasing manager, is really looking forward to this weekend.  “We are very excited to be able to open The Skybox at 2424 Studios this coming Friday, May 1st with an exhibition of graduate student art from The University of The Arts. The Skybox is a 6,000 square foot, state of the art, exhibition and event space with 40 foot high ceilings and natural lighting.”

In The Spirit of Art

The current exhibition on display at 2424 is from the undergraduate students at the University of the Arts.  There are some great pieces showing both the good and the bad of the human condition.  One piece made of wood, glass and scattered paper demonstrates the chaos that is, and potentially could be, if the prophecy about December 2012 comes to fruition.  Another great work on the more positive side is a simple sparkly rectangle with the world ‘fulfilled.’  This just goes to show that even when we have made it through the worst moments, even when there is a piece still missing, it is possible to have contentment.

The First Friday exhibit will showcase the work of the Master of Fine Arts students from the Printmaking/Book Arts and Sculpting departments of the University.  The students will be on hand First Friday to exhibit their work for their senior thesis.  If the undergraduates work is any example of the abilities of these students we are in for a treat.  The graduate students’ work will include varied pieces in artists’ books, installations, sculptures, drawings, posters, and prints.

Ruck also had something to say about keeping art in the building, “My long term goal…is to constantly be showcasing art.  I’m hoping that groups like the University of the Arts will take over one of the display spaces and create a committee to manage it.  They can set up their work, show it, take it down and put up new work.  Plus, it’s free for them to use.”

In The Spirit of The Past

For the better part of this building’s life, it was used as an industrial space.  Several companies have called this address home, but most refer to it as the Jacob Holtz Company building.  Many neighborhood residents remember the familiar comings and goings of employees each day as the factory went about its business making plastic wheels for moveable furniture like our desk chairs.  Then in 2007 the building stopped buzzing as the company moved to an expanded space outside the city.

With the building lying unused developers searched for a new tenant that would make the neighborhood happy.  Initially they had planned on turning it into either condominiums or government subsidized housing which was met with quite a bit of opposition from the community.  A second proposal would involve turning the space into housing for senior citizens.  This plan was not met with as much resistance but neighborhood residents wanted something that would contribute more to the economic development of the surrounding area.  Then much to their relief and satisfaction, it was announced that the building would become home to 2424 Studios–an affordable workspace for local artists and businesses.

In The Spirit of Cooperation

Once the proposed plan was set in motion, 2424 Studios set out to find new tenants.  There was some initial concern that with the reasonable rates the building would attract less than desirable occupants.  However, the team responsible for filling the units has been dedicated to finding local tenants that will be an asset to the community.

There are hopes that 2424 will follow in the footsteps of the Coral Street Arts House in North Kensington.  This properties renovation involved a combination of low income housing with space for artists to work.  The apprehension of locals was soon put to rest as they saw their new neighbors becoming part of the community and the streets came alive again.   The artistic residents reached out through their own efforts and the help of a service coordinator.  Soon they were hosting regular exhibits, workshops and youth arts programs.  All of this combined to help these artists grow and expand their businesses.

The 2424 building has such an abounding mix of clients and because of that, Ruck believes that they will work together to get involved and become part of the community.  They plan to have someone who can be both curator and community development expert, helping to keep the Skybox organized and promote the business owners in the building.

According to Ruck, the space will be available for the neighborhood.  “We are planning to program the Skybox with a mix of community events/uses, tenant exhibitions, and private events.”  Currently one third of the space is dedicated to community use.  It will be available for groups like the FNA and ORCA to have their meetings as well as a place to hold neighborhood craft fairs and flea markets.  The private events will include things like weddings and bar mitzvahs.

In The Spirit of Business

2424 Studios was happy last week to accept their first tenant into the building, Busybee Design.  They are an interior decorating and home staging company that is also going to be involved with 2424 itself.  They will be decorating the leasing office as well as setting up the model office spaces.  Joey Sweeney and his crew from Philebrity.com will also be moving into the building shortly.  They have a great new space near the Skybox from which they can bring us their comedic brand of media criticism and tips on city life.

The leasing office is still trying to get a café on board to take an excellent unit on the corner of York and Gaul.  Ideally they are looking for a local owner.  Jessica Ruck said she would like to see, “something like Café Estelle with a great chef.  A menu with crisp salads and paninis.”  There is still plenty of time to customize the space to the owners liking and the leasing office is including an additional unit for private parties or lunch gatherings for the building’s businesses.

2424 Studios is thrilled by the opportunity they have to bring even more life back into the neighborhood.  Come out on First Friday to help them celebrate the opening of the Skybox gallery and check out some of the great work from the MFA students at the University of the Arts.  2424 Studios are making their final preparations for the large volume of their clients move in this June and July.  Come out on First Friday and see what the future of this building holds for the community.

Periodically 806 Capital will issue a press release or get mentioned in the press.  Here is a sample of some of those releases and/or mentions.

• Normandy Realty Partners
• Patron Capital
• The Blackstone Group
• Federal Capital Partners

• Miles & Generalis Real Estate
• SSH Real Estate
• Vernick & Associates
• Stonehenge Advisors

806 maintains a strong network of relationships with other owners, investors and developers of real estate, and numerous capital providers.  It is a core part of 806’s strategy to work closely with other developers and investors to leverage their access to deals, expertise, and other capabilities.

Al joined 806 Capital as a Property Superintendent in 2006. Al’s experience comes from 25 years in all phases of apartment and commercial buildings. He’s worked in real estate development projects working with the Redevelopment Authority of Philadelphia, the Department of Housing and Urban Development, Pennsylvania Housing Finance Agency, and other Section 8 housing.

He is certified as a Manager of Maintenance, Refrigeration, and Asbestos Abatement. Al is a graduate of Building Trade School and Building Renovations.

Julie Julian joined 806 in September 2006 to manage accounting and support property and asset management. She hails from Singapore with a degree in Business Administration and Accounting. Her professional career spanned a term in retail and international banking in Singapore, Malaysia and Indonesia.

Her migration to the United States initiated her accounting career in senior housing where she was involved in the budgeting process, capital and fixed assets management, project analysis and development, medical billing, document retention and point of sales program.

Managing Partner [contact me]

Scott Radis leads 806’s presence in the Midwest from his native Chicago, IL. He is the founder of Raideye Acquisitions, LLC and SAR Capital, LLC and brings with him over 20 years of real estate, investment management, private equity and venture capital experience. Scott joined 806 in 2005 as a Partner and has sourced and structured multiple acquisitions for 806 and its affiliates, enabling the partnership to build a portfolio of multi-family and senior housing units across the country. In addition to sourcing new deals, Scott also actively manages those and other investments on behalf of 806. Prior to 806, Scott invested in and developed residential and commercial real estate in the Midwest, Southwest and on the East Coast. Prior to his career in real estate, Scott worked for Smith Barney and McDonald Investment as an Investment Manager. Scott attended the University of Illinois where he played on the Illinois basketball team. He graduated with a B.A. in Political Science and a minor in Business. Scott lives in Chicago, IL with his wife and three children.

Leo Addimando founded 806 Capital, LLC (“806”) in 2002 and has over 15 years of entrepreneurial, investment and management experience across multiple industries. He is currently a Managing Partner of 806 and manages all aspects of its operations and its investments on the East Coast. Leo has sourced, structured, and closed on multiple acquisitions for 806 and its affiliates, enabling 806 and its various partners to acquire and redevelop numerous multi-family, office and retail properties on the East Coast. Prior to founding 806, Leo was an early member of the management team of Orbitz.com, serving the company for three years in numerous business and corporate development capacities. Leo’s largest accomplishment while at Orbitz was spearheading the development and launch of ancillary business lines such as a merchant hotel platform, sales of travel insurance, and a co-branded credit card, which together were key profitability drivers enabling Orbitz to complete a successful IPO. Before working at Orbitz, Leo worked as an Associate for the Boston Consulting Group. In addition, he was the co-founder of both a media start-up and an internet start-up. Leo has an MBA from the Harvard Business School and a B.A. in Economics and Political Science from the University of Michigan. He is also a Board Member of the Preservation Alliance of Greater Philadelphia. Leo currently resides in Philadelphia, PA with his wife and two children.
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• Multi-family/Student Housing
• Office
• Retail
• Mixed Use

In addition to the above types of real estate, 806 also has experience with condominiums, senior housing and industrial assets.

806 is focused on identifying and executing real estate acquisition and/or (re)development projects where we can leverage our proprietary deal flow, development experience, access to capital, and wide range of expertise to create value. 806 investments generally fall into one or more of the following five categories:

• Distressed/Special Situations
• Value-add projects with some in-place cash flow
• Redevelopment of underutilized real assets
• Preferred Equity recapitalizations
• Projects involving Historic Tax Credits

The 806 team works hard to identify investments and investment partners that allow us to leverage our experience and infrastructure to deliver value to ourselves and our investors.

806 Capital, LLC is a real estate investment, development and management company with offices in Philadelphia and Chicago. Our focus is on real estate investment and development in the Northeast and Midwest. With particular expertise in multi-family, office and retail real estate, 806 has experience with almost all product types and deal structures.

Our investment philosophy is to deliver strong risk adjusted returns for ourselves and our investors through the sourcing of off-market and/or distressed transactions, the execution of carefully formulated business plans, and the use of intelligent capitalization structures. Additionally, in the deals where 806 is not actively involved in the management or (re)development of our investments, we are involved with high caliber strategic partners.

Since the beginning of 2006, 806 has acquired and/or (re)developed over $500M worth of real estate across the country. We have accomplished this through the use of our own capital, by raising limited partner equity, and by partnering with institutional private equity firms.