Financial terms were not disclosed; however, an overview of the portfolio, which is being marketed nationally by CB Richard Ellis, indicates asking prices in the low-to-mid six-figure range for each of the five properties. Douglas Rodio, VP with CBRE's Philadelphia metro private client group, tells GlobeSt.com that Cavender obtained the properties "at a substantial discount" off replacement costs.
The properties purchased by Cavender are located in the downtown areas of Pottstown, Phoenixville, Mount Penn, Milford and Pittston, PA, and include a total of more than 43,000 sf of office and retail space, including the Wachovia branches. Wachovia, the lead tenant in each property, plans to continue operating in all five locations, where triple-net leases are signed through 2024, according to a release from CBRE. Rodio says he's not in a position to comment on whether the impending acquisition of Wachovia by either Citigroup or Wells Fargo will affect the bank's occupancy of these spaces.
Cavender, which purchased the properties within a 90-day time frame, was looking for a steady income stream with potential to add value, according to the release. "The buyer was attracted to the 'Main and Main' locations in these small towns," Rodio says in the release. "The long-term triple-net leases with Wachovia ensure stability, while an aggressive leasing campaign will help the buyer realize the upside potential of these investments."
Office tenants at the five locations include accountants, attorneys and others "who benefit from the foot traffic that the Wachovia branch provides," Rodio tells GlobeSt.com. Vacancy rates at the five properties range from 34% to 46%; Rodio says Cavender plans to market the vacant space in-house.
Gramercy inherited 85 underperforming properties located in 22 states after its $3.3 billion acquisition of American Financial Realty Trust last March. Peter Stevens and Jim Pasquarella, EVP and senior associate, respectively, of CBRE's Investment Properties Group, are marketing the entire portfolio. To date, six of those properties located in northeastern Pennsylvania have sold: the five buildings purchased by Cavender, and a 7,907-sf office building in Wind Gap which sold last summer, Rodio says. He adds that another property is under contract, and his office is helping to market two other properties from the portfolio, located in Hanover and Mt. Carmel, PA.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
