The properties, primarily office parks, have an aggregate of 5.5 million sf, Florig tells GlobeSt.com. This represents about two thirds of Preferred's current approximately 8.7 million sf of total space.

"A price has not been established," says Michael O'Neill, founder and chairman. Area real estate executives speculate, on condition of anonymity, that the portfolio would command between $800 million and $900 million. "Ideally, the portfolio would sell to a single buyer," O'Neill says, adding, "that's our intention."

The decision to sell is not absolute, Florig says. "Any deal has to make sense." Neither O'Neill nor Florig would disclose the identities of the properties in the portfolio. According to published reports, the former Lee Tire Factory here, which O'Neill redeveloped in the late 1980s, is among them along with River Park, a converted paper company, and the former Quaker Chemical factory, also near here.

"It's a wonderful time to market some of our more significant assets," Florig tells GlobeSt.com, "because there's a lot of demand for a portfolio of this nature, which is primarily fully tenanted, class A buildings. At this time there's also a tremendous opportunity for us to acquire a lot of available properties that nobody else wants. Adaptive reuse is our main business."

He points to Preferred's current redevelopment of an old American Standard property in Hamilton, NJ as typical of the conversions to class A office parks the company focuses on. "Right now, Preferred has acquisitions with an aggregate of approximately five million sf under or near agreement," Florig adds, saying it expects to close on them this year. In terms of sf, that would bring Preferred's holdings back to its current level.

Asked how the 32 buildings in the sale portfolio were selected, he says, "most represent fully stabilized, complementary assets, many of which are grouped together under 10- to 12-year-old partnerships. It would be difficult to break them up." Brokers tell GlobeSt.com that the sale could bring a large national player into the Greater Philadelphia office market.

Instant Insights /

Preferred Seeks Buyer for 5M-SF, 32-Building Portfolio

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