HFF Arranges $160M Sale, Loan for Philly Office Tower
- Feb 20, 2018
HFF recently worked both sides of the table at 1600 Market St. in Philadelphia. The commercial real estate and capital markets services provider orchestrated the $160 million sale of the 826,000-square-foot office tower on Equity Commonwealth’s behalf, and arranged acquisition financing for the buyer, an affiliate of American Real Estate Partners.
HFF was able to land a three-year, floating-rate loan for AREP’s joint-venture purchase of 1600 Market, which last traded in 1998 for $106.4 million.
Boasting a “Main & Main” location in Philly’s central business district, 1600 Market is approximately 84 percent leased, with longtime tenant PNC Bank anchoring the 39-story high-rise in approximately 362,800 square feet of space—for now. PNC will “right size” its occupancy come 2019, decreasing its digs to roughly 233,400 square feet. AREP already has a vision for attracting new tenants to the value-add asset. The company plans to take the tower up a few notches through amenitization and the bolstering of the lobby-area retail.
Selling in the City of Brotherly Love
Investors were quite active in the Philadelphia office market in 2017; notable deals included the sale of the 1.8 million-square-foot Centre Square complex, marking the largest office transaction in Philadelphia‘s history based on square footage. And there’s more action on the horizon in 2018. “There is trepidation that the recent economic cycle is becoming rather long,” so with owners looking to capitalize at the peak of the cycle, 1760 Market St., 200 Market St. and 907 Market St. in the CBD were also listed for sale last year, as noted in a report by commercial real estate services firm Savills Studley.
Image courtesy of Equity Commonwealth