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UrbanAmerica Selling 435,000-SF Office Asset

PHILADELPHIA-UrbanAmerica hangs a tag, but not a price on 3535 Market St. In today's market, brokers say it could get $120 million.

By Marita Thomas | Updated on September 25, 2006

PHILADELPHIA-UrbanAmerica has enlisted a local team for CB Richard Ellis to market 3535 Market St. The New York City-based investment firm paid $80 million for the 18-story, 435,000-sf University City office asset in January 2003 and stands to gain about $40 million from the sale if predictions are right about its sale potential.

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.

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