KBS Buys 200 KSF Office Building in Suburban Philadelphia for $63M
- Feb 20, 2014
The premier office building at 1000 Continental Drive in King of Prussia, Pa., has a new owner for the first time in its seven-year existence. KBS Capital Advisors L.L.C. just acquired the 205,400-square-foot suburban Philadelphia property from private equity real estate fund manager Equus Capital Partners for $63 million.
KBS faced more than a little competition in its effort to snap up the building. “Investors seeking core assets were excited to pursue 1000 Continental,” Jim Vesey, managing director with Jones Lang LaSalle’s Capital Markets team, told Commercial Property Executive.
JLL presented the property to the investment community on behalf of Equus, which first introduced 1000 Drive in 2007, having built the six-story structure on an 8.5-acre parcel through its development operating arm, BPG Development Co. L.P. Today the property is 99.9 percent leased, boasting a tenant roster of mostly investment-grade credit tenants, including insurance companies Farmers Insurance, Hartford Insurance and Nationwide.
“There is a lack of trophy-class assets available in the Philly region today,” Vesey added. “This fact helped our marketing efforts, as institutional investors are targeting Philadelphia but have limited choices in the trophy class.”
The $300 per square-foot 1000 Continental fetched even surpassed the price tag on certain Class A office assets that recently sold in Philadelphia’s central business district. During the last half of 2013, the 1.1 million-square-foot tower at 1500 Spring Garden St., which underwent a $100 million renovation several years ago and has its share of credit tenants, sold for $184.5 million, or $166 per square-foot. And in the largest transaction of the third quarter, Brandywine Realty Trust agreed to purchase One & Two Commerce Square, which total 1.9 million square feet, for $331.8 million, or $175 per square foot.
“The pricing [on 1000 Continental] will certainly get the attention of other owners considering when to market their properties for sale,” Vesey concluded. “We anticipate more suburban office sales in 2014 than we have seen in recent years.”