South Jersey building expected to sell for really big number

A 155,308-square-foot building in South Jersey that was bought for $4.75 million three years ago is up for sale and could potentially fetch in excess of $80 million, according to one estimate.

The property at 1865 Marlton Pike East in Cherry Hill, N.J., is the epitome of a rags-to-riches real estate deal.

The building at 1865 Marlton Pike East in Cherry Hill, N.J., had once been occupied by Syms.

Finmarc Management Inc. of Bethesda, Md., bought the building, which sits on 11 acres, in 2013 for $4.75 million. At the time, the two-story structure was vacant.

Syms Corp. had emptied out of it in 2012 when its parent company filed bankruptcy a year earlier. The property had been occupied by a Syms retail outlet.

At the time it bought the building, Finmarc wasn’t sure which direction to take.

Among its options was to lease it to multiple tenants, redevelop it to accommodate a variety of uses – such as restaurants and other retailers, and even tearing it down and starting anew.

In the end, the company decided to spend $50 million totaling renovating the building inside and out after a division of the University of Pennsylvania signed a 20-year lease to occupy the entire structure beginning this October. Rents run $25.84 a square foot with two percent bumps up each year.

The property is “an extraordinary valuable piece of real estate,” said Robert Fahey of CBRE Inc., who along with colleagues Jeffrey Snell and Jerry Kranzel are marketing the building.

The lease is long and with a tenant that has extremely good credit, which makes it low risk and predictable and those features alone enhance its value, Fahey said.

But there are others.

“Interest rates are flat or negative throughout parts of the world and everyone is chasing yield,” Fahey said, noting the property’s two-percent annual increase in rents also make it a compelling investment.

Penn plans to consolidate several medical practices into the space as it expands its presence into affluent suburban areas not far from its University City base.

Source: Philadelphia Business Journal