Suburban Phila offices sold at deep discount

Brookwood Financial Partners LLC of Massachusetts has agreed to pay $183 million for 29 aging office buildings in Montgomery and Bucks Counties and the Lehigh Valley, according to a person familiar with the deal. The price was previously reported in the Philadelphia Business Journal.

Seller is DRA Properties, New York, which bought a controlling share of the same properties at an implied valuation of $293 million in 2007, just before the financial market crash that drove down office real estate values and the recession, the shift to smartphone-based work and the rise of off-site "cloud" computing cut demand for traditional office suites. In a statement, Brookwood President Thomas W. Brown said the suburban buildings sold at a deep discount to the cost of new buildings, making it possible to spend several million dollars in property improvements.

The deal includes the three-building Greenwood Square complex in Bensalem Township; nine buildings in Horsham, including 300 Welsh Rd., 630 Dresher Rd. and propertie son Business Center Drive; six in Fort Washington and nearby Ambler, including the Spring House Corporate Campus on Norristown Road (home to the growing Berkadia commercial mortgage group), and 500-01 Office Center Road; and office buildings in Allentown.

Vacancies in the 19 Philadelphia-area buildings buildings are being marketed for Brookwood by John Susanin, senior vice president at Colliers International, and his colleagues. Susanin says the suburban market continues its long recovery, and that it has been attracting out-of-town landlords like Brookwood who are encouraged by reasonable prices and increased inquiries from a variety of small and midsized tenants.

The properties were previously managed by Brandywine Realty Trust, which was also minority owner. Brandywine, like its larger rival Liberty Property Trust, has been selling off older suburban office real estate to concentrate on Center City towers and new and higher-margin properties; Liberty is now primarily a warehouse company, and real estate sources say it has been in talks to sell its own suburban offices in Montgomery County and other suburban markets.