Another trophy office building comes on the market

Roughly three years after buying Five Tower Bridge for $73 million, the owner of the premier office tower in West Conshohocken, Pa., has decided to put the property up for sale.

Some in the commercial real estate industry believe the property could set a new sales record for suburban office buildings and trade somewhere in the neighborhood of $375 a square foot, according to estimates. If it does come in at or near that price, it will exceed a $360 a square foot record set late last year when Radnor Court sold.

MIM-Hayden Real Estate Fund I, which is a partnership comprised of Hayden Real Estate Investments, Miller Investment Management, both of Conshohocken, Pa., and the Davis Cos. of Boston, bought the 8-story, 223,736-square-foot office building at 300 Barr Harbor Drive at the end of 2011.

It was a time when the commercial real estate investment market was still struggling in general, but interest for suburban office properties were especially lagging. Suburban investment sales are just starting to show signs of a rebound.

Recent deals put Five Tower in good shape for a potential sale. This past spring, the landlord renewed and expanded Oracle Corp.’s presence in the building until 2026 and at $33 a square foot rents. The deal solidified the building’s overall occupancy on a long-term basis. Aside from Oracle, Five Tower is fully leased to Hirtle Callaghan & Co., BTG International Inc., Wells Fargo, and KRT Capital Partners.

This is the second office property to come on the market in Conshohocken this month, joining 300 Four Falls, which is also one of the region’s top buildings. It totals 297,320 Square feet and last sold in 2006 for $100 million, or $340 a square foot, a figure it is expected to exceed that when it trades this time around.

Both Five Tower and 300 Four Falls are expected to be chased by institutional investors looking for well located trophy office properties leased up on a long-term basis to credit tenants.

Five Tower, which is being marketed by Robert Fahey of CBRE Inc., was constructed by Oliver Tyrone Pulver in 2001 as part of the real estate company’s Tower Bridge complex it has developed in West Conshohocken and Conshohocken.

Source: Philadelphia Business Journal