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PITTSBURGH, PA-The sale of the leasehold interest in One Mellon Center is expected to close early this month. The buyer is Metropolitan Life Insurance Co. The seller is Philip Morris Capital Corp. GlobeSt.com first reported on the property coming to market in early March.The sale price for the 50-story, 1.5-million-sf CBD office building here is estimated to be in the vicinity of $217million, according to a one industry source who tells GlobeSt.com the sale price is between $140 per sf and $150 per sf. The $217-million figure equates to $145 per sf and a cap rate in the 7% range.The building is master leased to Mellon Financial, which recently extended its lease through 2028. GVA Williams’ broker James Murphy brokered the lease extension and the sale. He declined to confirm the expected sale price, but did say the new bondable lease extension, which took 18 months to negotiate, begins in 2008.Mellon occupies 1.1 million sf for its world headquarters and subleases the remainder, which includes 130,000 sf of retail on three levels and 270,000 sf of office. According to the lease agreement, Mellon will pay $62.92 million per year through 2008–all of which will go toward debt service, according to the source–and then $15 million per year thereafter. The aggregate value of the lease is $551.7 million, according to public documents. According to local reports, Mellon Financial will be vacating DeBartolo Property Group’s Two Mellon Center [also known as the Union Trust Building] here when its lease expires in May 2006. The three buildings it will continue to occupy are One Mellon, the 41-story 525 William Penn Place building and its 750,000-sf, three-year-old Client Services Center.

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