X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHILADELPHIA-Transwestern Investment Co. and the Blackstone Group have put the office building at 1700 Market St. up for sale. Chicago-based Transwestern acquired an 89% stake in this building and another at 1601 Market St. in November 2004 from Equity Office Properties Trust, also based in Chicago. The 1601 building may also be in play.

EOP, which was later acquired by Blackstone, retained an 11% share of the two-building portfolio. The Transwestern/Blackstone partnership has enlisted Jones Lang LaSalle to market the 841,172-sf, 32-story asset at 1700 Market St. It is going out unpriced. On condition of anonymity, an area office specialist tells GlobeSt.com it could command up to $200 million.

If so, that would put it close to $237 per sf and represent a significantly profitable flip. According to GlobeSt.com’s report on the 2004 acquisition, Transwestern paid $172.2 million for its 89% stake in both properties. They have an aggregate of 1.5 million sf, which means at a 100% aggregate price tag of $193.5 million, the price per sf of the duo was about $129 per sf.

Thomas Beneville, managing director, and Jay Miele, VP in JLL’s New York City office, are leading the marketing team, working with Bill Luff, EVP and managing director, and Josh Sloan, SVP, in JLL’s local office. Beneville says the partnership may consider adding the 1601 Market St. asset “to the offering for the right buyer.”

Regarding the reason for the sale, Miele tells GlobeSt.com, “they invested more than $6 million in capital improvements, including a lobby renovation at 1700 Market St. The building had some rollover issues, and they had a good lease-up program. They think the timing is right to move on.” He says the building is now 95% leased and the market rent rates are between $23.50 per sf and $25 per sf. Among the tenants are Deloitte Touche, Independence Blue Cross, AIG, Xerox and Commonwealth Land Title Insurance Co.

Of the 36-story, 681,000-sf building at 1601 Market St., Miele says, “the thought is to market that at some point to a separate buyer. It is not on the market now, but, if a buyer has interest in both, we’ll talk.” It, too, has had good lease-up, and he says it is 94% occupied. Its rent rates “are probably slightly lower than at 1700,” he says, because the latter building “has more open views north and south.”

Meanwhile, the JLL team is marketing 1700 Market St. broadly, “nationwide and to offshore prospects,” according to Miele. “There is appeal here now among offshore buyers.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.