Winthrop Sells 500 KSF Philly Office Property
- Dec 04, 2014
Winthrop Realty Trust continues its liquidation program with the disposition of 1515 Market St., a 500,000-square-foot office property in in Philadelphia. The REIT sold the Class A asset to Accesso Partners L.L.C., formerly Beacon Investment Properties, for $85 million.
Sited downtown, 1515 Market is 87 percent leased to a roster of tenants that includes law firms, the Commonwealth of Pennsylvania and Temple University, which will continue to anchor the tower in 128,000 square feet under a lease that was recently extended through 2022. The 20-story building also features nearly 15,200 square feet of ground-level retail space.
Winthrop had owned 1515 Market, also known as Three Penn Center, since December 2012, when the REIT acquired the non-performing first mortgage loan on the tower for just under $57 million, approximately $13 million less than the outstanding balance on the loan. Now, Winthrop has pocketed $40.8 million of net proceeds from the sale of the property to Accesso.
There was no lack of investor interest in the asset. Commercial real estate services firm JLL marketed the asset on Winthrop’s behalf and reeled in more than 100 potential buyers.
Winthrop expects to complete the disposition of its holdings by Aug. 5, 2016; two years after the Board of Trustees approved the plan of liquidation.
At the beginning of 2014, following a year of poor performance of Winthrop share pricing, it was clear that big change was imminent for the REIT.
“Management and our Board of Trustees are acutely aware of our share price performance and of the need to improve shareholder value where it counts the most – share price,” Michael Ashner, CEO of Winthrop, wrote in an April 2014 letter to shareholders. “To that end, we have and will pursue all reasonable alternatives during the coming year with an open mind.”