Peter Bren's KBS Real Estate Investment Trust, Newport Beach, Calif., says it paid $73 million, or $326 and change per square foot, for the eight-story Five Tower Bridge office building, on ten acres above the Schuylkill and just off I-76 and the R6 Norristown Septa line, 300 Barr Harbor Drive, West Conshohocken. Asking price was $78 million.
As PhillyDeals reported back in May, the tower, built in 2001 by Oliver Tyrone Pulver Corp. and financed by a client of Mass Mutual's Cornerstone Real Estate Advisers, "counts Keystone Foods L.L.C. (now paying $32.50/sq. ft., leased till 2016), Nationwide ($33/2013), and pharma companies BTG International Inc. and Eli Lilly & Co. among its tenants, according to an ad placed in Real Estate Alert last week by CB Richard Ellis Group Inc. broker Robert J. Fahey." Other tenants include KTR Capital Partners and Hirtle, Callaghan & Co, KBS says.
In a statement, KBS director of acquisitions Shannon W. Hill called Five Tower "a trophy-quality asset in one of the most desirable Philadelphia submarkets." More on KBS at www.kbsreit.com
"It speaks well for the market. It's the second-highest price that's been paid for a building in suburban Philadelphia," said Fahey. The highest was BPG's nearby 300 Four Falls, at $347 a square foot, in early 2006. "Conshohocken gets the highest rents in the suburbs. The construction quality is higher than you find -- deck parking, marble and other high end finishes, a high-rise, city-oriented building built to higher standards. In a real estate market weaker than it's been in five or six years, the best buildings in the best submarkets are still commanding very healthy pricing," while lesser buildings are "under pressure."
KBS is one of a group of non-publicly-traded REITs that have replaced big pension funds as the busiest real estate investors at the moment, Fahey added.