KBS Continues Shopping Spree with $73M Philly-Area Office Buy

Five Tower Bridge (pictured), a 223,700-square-foot trophy office property in West Conshohocken, Penn., has been snapped up by KBS Real Estate Investment Trust I. In a deal valued at $73 million, the REIT took the suburban Philadelphia property off the hands of Five Tower Bridge Associates, a partnership involving Cornerstone Real Estate Advisors, Brandywine Realty Trust and Oliver Tyrone Pulver Corp. The team developed the office building in 2001.Located at 300 Barr Harbor Dr. on an approximately 10-acre parcel adjacent to the Schuylkill River and about 15 minutes from downtown Philadelphia, Five Tower Bridge sits within the 45-acre, 1.2 million-square-foot mixed-use Tower Bridge master planned development. Designed by Skidmore, Owings & Merrill, the eight-story structure offers three levels of covered parking and provides easy access to public transportation and interstates 76 and 476. With an occupancy level of 97 percent, Five Tower Bridge’s tenant roster is near maximum capacity, featuring the likes of such creditworthy tenants as BTG International, Eli Lilly & Co. Keystone Foods, KTR Capital partners and Nationwide Insurance.”Five Tower Bridge is the gem of the Philadelphia suburbs,” Robert Fahey, executive vice president with CB Richard Ellis, told CPN. CBRE represented the seller in the transaction. “It is undoubtedly of the highest quality and it’s the most highly sought after by tenants. There’s only one of these buildings in every market, and Five Tower Bridge is it for suburban Philadelphia.” CBRE began marketing the property at beginning of the summer, and while investor interest was not as strong as it probably would have been a year or so ago, the building still commanded significant attention. “There was a fairly healthy demand for the property because from an income and value perspective, it’s stable and less risky.”For the seller, disposition of Five Tower Bridge several years after having developed it was always part of the plan. According to a source familiar with co-owner Cornerstone, the sale was a simple business cycle decision; it was time to recycle the property.For KBS REIT I, the purchase of Five Tower Bridge dovetailed perfectly with its current acquisition strategy. “What we’re trying to do right now is buy high-quality assets that are considered the top product in their markets, and that are well-managed and have strong cash flow,” Shannon W. Hill, KBS senior vice president and director of acquisitions, told CPN. “The idea is to buy the best assets available. Regardless of where the market goes, they’ll still be good assets that we can keep well-leased. And we definitely want to enjoy the cash flow; this is not seen as a quick flip.”