TCC put the property under contract and procured all the required entitlements for development of the site. US Real Estate is acquiring the property, and TCC will be responsible for implementation of the development and for leasing. This is the first JV of this kind between the two companies. The construction cost is undisclosed. A Central Pennsylvania real estate executive tells GlobeSt.com, on condition of anonymity, "the value of the building will be in excess of $30 million."
"On a relative basis, the Central Pennsylvania region remains extremely viable for tenants and investors alike," according to Frank Petkunas, who is TCC's SVP of development based in its Conshohocken office. "Tenants benefit from proximity to efficient and lightly traveled infrastructure, as well as operating costs significantly lower than many other northeastern locations. Investors, on the other hand, benefit from higher risk adjusted returns driven by the abundance of local high-credit tenants as well as lower volatility in property values not apparent in other comparable markets," he says.
T. Patrick Duncan, USAA's SVP of real estate development, says the combination of his company's financial strength and TCC's local expertise creates the "foundation for a well capitalized and nimble relationship. Our belief is that we'll collectively possess the ability to react quickly to changes in both general economic conditions as well as local market demand." Both men refer to a "wave of development" that has occurred throughout the central Pennsylvania region over the past five years.
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