DHS Pays PCCP LLC $87.4M for Upper Bern Township, PA Warehouse — 52% Markup on 17-Month Hold; Heitman $46.4M Acquisition Loan

On February 2, 2026, the U.S. Department of Homeland Security acquired a 518,140–520,000 square-foot Class A warehouse at 3501 Mountain Road in Upper Bern Township, Berks County, Pennsylvania from PCCP LLC — operating through its entity “3501 Mountain Road Owner LLC” — for $87.4 million. PCCP had acquired the same property in September 2024 for $57.5 million from a joint venture of Transwestern Development Co. and QuadReal Property Group, financing the purchase with a $46.4 million acquisition loan from Heitman Capital Management (maturity 2027). The federal sale produced a $29.9 million gross gain — a 52% markup on a 17-month hold — on a building that was vacant at acquisition and had no commercial tenant at time of sale to DHS.

What Happened

The property: The Hamburg Logistics Center, formerly known as Mountain Springs Arena, is a purpose-built cross-dock industrial facility that came online in 2021. Its specs — 40-foot clear heights, 100 dock-high loading doors, four drive-in doors, 294 car-parking and 126 trailer-stall spaces, 185-foot truck courts — are standard for last-mile and distribution logistics. The building was vacant when PCCP acquired it from Transwestern/QuadReal in September 2024 and remained without a signed commercial tenant when DHS closed on February 2, 2026.

PCCP’s position: PCCP (Pacific Coast Capital Partners) is a Los Angeles-based private commercial real-estate debt and equity platform founded in 1998, managing $29.3 billion in assets under management as of December 31, 2025, with over $47.8 billion raised since founding. The firm invests across the capital stack in joint venture equity and debt positions. Greg Eberhardt, a PCCP partner, was the authorized signatory on the 3501 Mountain Road Owner LLC deed. When Spotlight PA contacted him, Eberhardt said “I have no idea what you are talking about” and ended the call. PCCP did not respond to further press inquiries.

The Heitman loan structure: PCCP’s $46.4M Heitman Capital Management acquisition loan carried an approximately 81% loan-to-value ratio at acquisition ($46.4M / $57.5M). The 2027 maturity date was approximately 30 months from closing. A federal sale at $87.4M — executed 17 months into that window — would retire the Heitman loan at full par value and return approximately $41M in equity proceeds on an estimated $11.1M equity outlay, a rough equity multiple of approximately 3.7x if standard leverage math applies.

Why This Event Matters

The PCCP / Upper Bern transaction adds a third structural specimen to the lender-recovery sub-mechanism documented in Layer 3 of warehouse-fungibility-and-the-detention-hedge:

• Goldman/Fundrise (Williamsport, MD): Goldman Sachs lender made whole on a $352.7M syndicated loan against an impaired REIT portfolio; DHS as buyer-of-last-resort resolved the collateral impairment.
• DWS/RREEF (Salt Lake City): Deutsche Bank subsidiary extracts $145.4M from private fund LLC with minimal US securities disclosure.
• Heitman/PCCP (Upper Bern, PA): Private real-estate credit lender (Heitman Capital Management, a Chicago-based institutional real-estate investment manager) holds a high-LTV loan against a vacant speculative warehouse. A DHS purchase 17 months into a 30-month window retires the loan at par and produces a 3.7x+ equity multiple for PCCP.

The common structure: a high-LTV loan against a vacant or underperforming commercial property; federal purchase at premium pricing that retires the loan cleanly and converts the lender’s collateral from an occupancy-risk position into cash. The PCCP / Heitman case is the clearest example yet of a private-credit lender benefiting from the WEXMAC-TITUS federal-buyer-of-last-resort function.

No personnel-capture leg: PCCP is privately held. No Trump administration officials hold PCCP equity positions in the ProPublica financial disclosures database. The absence of personnel-capture conflicts makes Upper Bern structurally identical to the PNK Social Circle pattern: capture operates entirely through the transaction, not through prior equity alignment between seller and approving officials. See 2026-02-03–dhs-purchases-carlyle-oakwood-ga-warehouse for the contrasting Carlyle pattern (22 officials with equity conflicts).

Planned Use and Current Status

DHS planned to convert the Berks County warehouse to an approximately 1,500-bed ICE immigration detention facility. As of April 23, 2026, construction has been blocked by Pennsylvania Department of Environmental Protection administrative orders (issued alongside the Tremont, Schuylkill County order in March 2026), barring water/sewer connection or occupancy. ICE filed an appeal with the PA Environmental Hearing Board on April 8, 2026 seeking a “reasonable use” exception for prior-owner-approved capacity levels. The facility has received zero detainees.

Research Gaps

• Whether PCCP’s Heitman loan was in fact repaid from the DHS sale proceeds, or whether a different refinancing occurred
• Whether Transwestern Development Co. or QuadReal Property Group had any prior awareness of federal interest in the property before PCCP’s acquisition
• PCCP’s other speculative warehouse acquisitions in Pennsylvania or adjacent states during 2024–2026 — potential additional properties in the DHS pipeline
• Heitman Capital Management’s total commercial real estate loan book exposure to WEXMAC-TITUS adjacent properties

Related Entries

• warehouse-fungibility-and-the-detention-hedge — Layer 3, lender-recovery sub-mechanism context
• wexmac-titus-warehouse-census — Site 8 (Upper Bern Township)
• 2026-01-29–dhs-purchases-blue-owl-tremont-warehouse — companion Pennsylvania transaction (Site 2)
• pccp-carlyle-pnk-rockefeller-warehouse-seller-details — full four-firm seller details research note
• forst-edward — GSA Administrator during this transaction
• pccp-llc