Triple Net Takes 1818 Market St. for $153M

This buy joins Triple Net's 2003 acquisition of the Public Ledger Building in the Independence Mall submarket here in 2003 and follows by less than three months its $101-million acquisition of 300 Four Falls, a 298,371-sf class A office property in West Conshohocken. "We think Philadelphia is overlooked," Louis Rogers, Triple Net's president, tells GlobeSt.com. "It's a market that we think has recovered. We look for opportunities, and often they are in markets like Denver, Milwaukee and Philadelphia." Robert Fahey and Lizann McGowan of the local office of CB Richard Ellis represented the seller in the transaction, working with Brendan Considine, Triple Net's director of acquisitions. Eric Tupler, senior director in the Denver office of CBRE Melody, arranged $132 million in acquisition funding from Wachovia Securities. It is a 10-year loan at a 6% fixed rate with five years of interest-only payments followed by a 30-year amortization schedule.

The building is 95% leased, and Sunoco, Day & Zimmerman and Zurich Insurance are among the major tenants. "There's not a lot of rollover, and Market West is the largest office submarket in the CBD," Considine says. "We see this as a part of the revitalizing of Downtown Philadelphia," he adds, referring to Center City's residential boom, which includes conversion of older buildings to condos, reducing the office vacancy rate while increasing demand for walk-to-work business locations.

The asset was built in 1974. According to Considine, it has received about $9 million in renovations and upgrades, including a new lobby and expanded parking, over the past several years. Triple Net has not yet determined who will handle leasing. The rental rates are between $21 per sf and $22 per sf, Considine says.