While the sale price was not disclosed, sources say the asset likely traded for a number "well in excess of $60 million," according to one. That estimate is based in part on published reports that the redevelopers' cost of buying and converting the property was in the $50-million range.

The center, located on 33 acres at 111 Woodcrest Rd. near the NJ Turnpike and I-295 in metro Philadelphia's South Jersey suburbs, is a redeveloped one-time industrial site. It was formerly the headquarters and manufacturing site of the defunct Langston Steel Corp., which made production equipment for the corrugated packaging industry. That company filed for bankruptcy in the mid-'90s and was liquidated in 2001. O'Neill teamed up with the Wayne, PA-based Strategic Realty Investments to buy and redevelop the property, which had stood vacant for two years, as a class A office complex.

"This newly reconstructed building is on a single level with direct access for each tenant," says Robert M. Behringer, chairman and CEO of Behringer Harvard. "Because this configuration has no comparable counterpart in the submarket or the surrounding areas, it's very unique.

"Combined with the fundamental strengths of this market, we expect this property's tenant stability, tax incentives and building efficiencies to deliver attractive returns for investors," says Behringer, who notes that the acquisition marks his firm's entry into the metro Philadelphia market.

The property, which also includes a small retail component and a skylit town-center area, as well as 24-foot ceilings and floor-to-ceiling exterior glass walls, got its major redevelopment impetus in the summer of 2003 when Towers Perrin, the Stamford, CT-based management consulting firm, agreed to sign a lease for much of the existing building, approximately 200,000 sf, for 10 years with two five-year options. That space is occupied by 1,000 employees of Excellerate HRO, an HR business co-owned by Towers Perrin and EDS.

In mid-spring of 2005, Popular Mortgage Servicing, a newly established subsidiary of Popular Financing Holdings and a successor company to Equity One, signed on for 57,000 sf. And in late September American Water Works agreed to lease nearly 55,000 sf, consolidating employees from three other South Jersey locations. The American Water deal brought the building to 93% occupancy.

Instant Insights /

Behringer Harvard Buys 333,000-SF Office Complex

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