Commercial real estate brokers Jones Lang LaSalle says it sold the 1700 Market Street office tower in Center City, for Chicago-based owner Pearlmark Real Estate Partners (ex-Transwestern Investment), to Brooklyn-based property investor David Werner and his partners, for $143.5 million, or $170 a square foot.
That's a little less than the $178 /sq ft landlord Brandywine Property Trust paid last summer for the Commerce Plaza complex two blocks west and across the street. That reflects the difference in rents: 1700 offices rent at around $25-26 a sq ft while Commerce asking rents are a few dollars higher.
The building is around 85 percent occupied; lead tenants include Deloitte and Independence Blue Cross. The contract, negotiated in May, "closed on schedule despite a tumultuous capital market in August and September," said Tom Beneville, international director for Jones Lang, who led the team that closed the deal.
Mortgage-backed commercial-property bond financing stalled this summer as investors demanded better collateral, forcing borrowers to turn to higher-priced bank financing, said a financial source familiar with the deal.
Beneville called the sale a significant deal for Philadelphia: "It's a big building, there was a lot of competition from institutional U.S. and offshore investors, it's out of town New York capital, and it's a major institutional lender."