Arden Group Acquires 254 KSF Class A Office Property in West Conshohocken, Pa.
- Jan 10, 2014
Arden Group, a Philadelphia real estate development and management firm, has acquired 100 and 200 Four Falls Corporate Center, a 254,000-square-foot, Class A office property in West Conshohocken, Pa., that was in receivership, for a reported $43.5 million.
Arden Group did not disclose the purchase price but The Philadelphia Inquirer reported that it was $43.5 million, or $171 per square foot, for the two six-story buildings. The company said it made the purchase through its affiliated discretionary fund, Arden Real Estate Partners I, L.P., which was launched in April 2012. It is the fund’s sixth acquisition in the past 16 months and second in the Philadelphia market. Since 1989, Arden Group has purchased or developed more than $2.3 billion of real estate.
The property in the Philadelphia suburb is 76 percent occupied. It was purchased from the unidentified lender, a CMBS trust which took control of the property from the owner in a deed in lieu of foreclosure in 2011, according to an Arden Group news release. The Philadelphia Business Journal said the buildings were previously owned by a joint venture of Thomas Properties Group, Inc. and the California State Teachers Retirement System.
Starwood Property Trust, a commercial mortgage REIT, provided Arden Group with the acquisition financing.
“The purchase of Four Falls fits perfectly into Arden’s strategy of opportunistically investing in high quality properties that are located in major markets, and which are experiencing positive job growth,” CEO Craig Spencer said in the release. “Having acquired Four Falls directly from the lender offers a unique opportunity for significant value creation through our operating and management experience and allows us to add another quality property to our growing portfolio at the right time, in the right location and at the right price.”
Spencer said the firm will spend about $3.5 million renovating the buildings, including the entrance, lobby, elevators and common areas so that they can compete with other properties in the popular West Conshohocken office market. The area is located at the intersections of I-76, I-476, PA-23 and near the Pennsylvania Turnpike.
Arden Group hired the CBRE team of Daniel Dagit, senior vice president, and Thomas Stone, associate, to handle leasing at Four Falls.
The Conshohocken submarket had one of the lowest vacancy rates in the Philadelphia region in the third quarter of 2013, according to a Cushman & Wakefield Marketbeat Office Snapshot Report. The overall vacancy rate for the third quarter was 9.5 percent and the direct vacancy rate was 8.6 percent. Only the Main Line submarket had lower vacancy rates for that quarter, according to the report. Cushman & Wakefield said the region’s unemployment rate was improving toward the end of 2013, contributing to the better results.
“The Suburban Philadelphia office market has gained momentum over the past six months and will close out the year in better shape than 2012,” the report stated. “The overall vacancy rate continues to decline, direct asking rental rates have increased and year-to-date leasing activity has nearly surpassed all of 2012’s total activity.”