Office complexes sell for $89.4M
Two area office complexes — in King of Prussia and West Chester — have recently been sold for a combined total of $89.4 million, according to CBRE Group Inc., which arranged the sales.
The market for office complexes, especially suburban office complexes, continues to improve, according to Stephen Marzullo, senior vice president for CBRE.
“Vacancies are continuing to decrease, landlords are beginning to feel comfortable raising rents and there is more confidence in the leasing market of office complexes,” Marzullo said in an interview Thursday. “As investors become more confident, they tend to get more active.”
The first property CBRE arranged the sale of and secured financing for is the 14 building Renaissance Park complex in King of Prussia. The property was purchased by MLP Ventures of Radnor for $76.9 million.
The 641,325-square-foot complex is currently 87 percent occupied by a mix of tenants that includes Marsh & McLennan Companies, Ikea, BB&T, RELX Group and MedRisk.
CBRE Capital Markets’ Institutional Properties team of Robert Fahey, Jerry Kranzel, Erin Hannan and Jack Corcoran represented the seller — Malvernbased developer Liberty Property Trust in the negotiations — while CBRE’s Debt & Structured Finance team of Nick Harris and Steven Doherty procured the financing on behalf of the buyer.
“We are pleased to once again have the opportunity to work with the fine team at Liberty Property Trust and assist them in achieving their corporate objectives,” Fahey, executive vice president of CBRE, said in a press release.
The second complex sold is
West Chester Office Plaza — a 116,621-square-foot complex of five buildings at the corner of Westtown Road and Market Street (Route 3) in West Chester. The complex was purchased by Maguire Hayden Real Estate Co. for $12.5 million.
The five office buildings are situated on an 8.3-acre site and were completed between 1964 and 1976. The complex is currently 90 percent leased to 48 tenants occupying spaces ranging in size from less than 1,000 square feet to more than 33,000 square feet. Among the tenants are American Precision Industries, ESCFederal,
Women’s Health Care Group of PA, BackOffice Thinking and Kinetic Prosthetics.
CBRE’s Philadelphia Commercial Investment Properties team of Marzullo and Adam Silverman represented the seller, High Associates.
“West Chester Office Plaza has been institutionally owned for more than 30 years and its buildings are exceedingly well maintained,” Silverman, vice president, CBRE said in a press release. “The property has built a reputation as the preferred choice for small and mid-sized tenants who want access to the downtown borough.”
Marzullo added that suburban office space remains a property type that has the highest yield — or return on
investment for investors.
“In other markets like retail, industrial or medical properties and apartments, competition is tight, which has pushed up prices. And that means the yields aren’t as high,” Marzullo said.
Marzullo added that he expects to see the current trend continue throughout 2018.
“With tax reform, businesses will hopefully expand and hire new employees — which will provide strength to the office market,” he said, adding that interest in suburban office space is being generated both locally and from outside the region.