Three Beaver Valley Road, an office building in
Wilmington, Del., was on the market for just about six weeks when it received
10 offers from investors in seven different states. It ultimately sold for
$61.8 million, or $235 a square foot.
That is considered quick deal making but for a building
like Three Beaver, it fit just about everything an investor wants these days in
a suburban office property.
The five-story structure totals 264,000 square feet and
is 94 percent occupied with Farmer’s Insurance serving as the anchor tenant.
The insurer renewed its lease at the end of last year on 211,000 square feet for
10 years. Solenis International occupies 39,121 square feet for its
headquarters and just 13,000 square feet is vacant.
“The more specialized the building the more national
interest and more activity it will get,” said Brett Segal, an investment broker
with Newmark Grubb Knight Frank.
Segal along with Dave Dolan, Jeff Mack, Mike Margolis and
Neal Dangello arranged the transaction. They represented the seller, an
affiliate of KBS Realty Advisors, and buyer, Medistar Corp., a Houston-based
developer and owner of mostly medical-related facilities.
Three Beaver Valley was constructed in 1995 and the KBS
affiliate upgraded its lobby, parking and roof.
Suburban office buildings, especially those that aren’t
located in core markets, have been a hard sell over the last couple of years.
However, some suburban listings that fit a similar profile as Three Beaver —
leased on a long-term basis to basically a single tenant with strong credit —
are generally getting more investor attention compared with some multi-tenanted
buildings on the market, Dolan said. He cited the Piazza at Main Street, a
45,000-square-foot building in Voorhees, N.J., as an example. It is fully
leased on a long-term basis to Cooper Health, up for sale and getting lots of
offers. O’Neill Properties recently sold the Merion building, a
73,326-square-foot medical office building at 700 S. Henderson Road in King of
Prussia, Pa., for $18.5 million, or about $254 a square foot.
Source: Philadelphia
Business Journal
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