Capital One Corp. is still best known as the cheerfully aggressive credit card lender that used cartoonish Viking warriors in its ads. But the Virginia-based loan giant, feeling pressure to diversify its operations in the mid-2000s, has become one of the biggest lenders to Philadelphia construction projects since it hired a team headed by veteran business banker Rick Lyon, in the financial collapse year of 2008, to build up its East Coast commercial real estate projects.
Deals by Lyon (who trained at the old Philadelphia National Bank and served its successors for 28 years) and his Philadelphia-area team headed by Glenn Gallagher (a veteran of the old Provident, Fidelity and CoreStates) include, for example:
- $35 million for Joe Zuritsky's taxpayer-subsidized Home2Suites hotel in Center City Philadelphia (new this year)
- $100 million (split with PNC Bank) for the joint venture of Jerry Sweeney's Brandywine Realty Trust and Ted Rollins' Campus Crest Communities' West Philly grad-student tower, now under construction
- $30 million for PREIT-Rubin's 2011 conversion of the former Strawbridge & Clothier at 801 Market St. into offices (for the Inquirer, among others)
- $35 milllion for Bruce Toll's 2009 Dublin Terrace apartments in Fort Washington
The're all longterm clients of Lyon and his colleagues, and among the 25 builders Capital One has funded in the region, he told me. "We're one of the Top 3" commercial real estate lenders now active in Philadelphia, ahead of Citizens (the former Mellon-PSFS and Girard) and behind only Wells Fargo (PNB-First Pa.-CoreStates-Fidelity-Meridian-etc.) and PNC (Provident), especially after Bank of America pulled back in the wake of the crisis.
Apartments, hotels, conversions -- whatever happened to new office construction? "There's not a lot of growth in office," Lyon acknowledged. Not even in New York, where Capital One has a branch network (acquired from the former North Fork Bank, whose boss John Kanas was often compared to Commerce Bank's bombastic Vernon HIll). What's wrong with offices? There are plenty already in Center City and Manhattan.
Besides Lyon's office on Continental Drive in King of Prussia, Capital One has lately acquired more than 1,000 workers in the Wilmington area, having bought both the former ING Direct Bank -- the lender with the orange coffeehouse near Rittenhouse Square -- and HSBC Bank's U.S. credit card arm.
Capital One is one of the few banks in the region now advertising aggressively for new workers, who are plentiful in Wilmington since its former rival, Wilmington-based MBNA Corp., once Delaware's largest private for-profit employer, was acquired in 2006 by Bank of America, which has been laying people off down there ever since.