There is no asking price, Michael Blunt, a CBRE first vice president, tells GlobeSt.com. "But it should produce an annual yield of 7%, which would bring it to about $120 million," he says. That would take it to the range of $275 per sf versus UrbanAmerica's purchase price of nearly $184 per sf. In contrast, the Center City office building at 1818 Market St. and Penn Mutual Towers traded this year for $156 per sf and $141 per sf, respectively.
The University City building, completed in 1972, is one of few assets in the submarket not owned by that area's universities or hospitals. It currently is 99% leased, with Children's Hospital of Philadelphia and the University of Pennsylvania occupying about 95% of the class A space, according to Blunt.
"There's the opportunity, because rental rates in the University City submarket are now ranging between $24.50 per sf and $25.50 per sf, which is above the rate for current leases in the building," Blunt says, citing the submarket's "accelerated activity" for all types of product, including residential, retail and research.
"UrbanAmerica has invested in upgrades and has done a good job of maintaining the building. They're raising another fund so they felt this was a good time to sell and reinvest the gain," Blunt says. "The property will hit the market later this week. We are targeting national and international investors." CBRE executive vice president Robert Fahey and first vice president Lizann McGowan are also on the marketing team.
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