Main Line Office Portfolio Last Sold Before Recession Hits The Market At A Discount
A portfolio has hit the market in a move indicative of how much office real estate has changed since the Great Recession.
Pitcairn Properties bought Chesterbrook Corporate Center in Berwyn and Glenhardie Corporate Center in Wayne for $250M in 2006, and has put them up for sale expecting to receive only $210M, the Philadelphia Business Journal reports.
Combined, the properties up for sale in the two Main Line office parks contain 18 buildings totaling 1.3M SF. Chesterbrook totals 1.7M SF of office on 175 acres, although some buildings on the campus are owned by Equus Capital Partners and Workspace Property Trust. Glenhardie contains 255K SF of office space, according to the PBJ.
The portfolio is 81% leased, a number that is set to go down when AmerisourceBergen leaves 190K SF across two buildings in 2021 as it moves to SORA West in Conshohocken. Johnson & Johnson affiliate Animas Corp. has a 120K SF lease that expires in 2020. The amount of impending vacancy has driven the price down, as has the seismic shifts within office development.
AmerisourceBergen represents the issue in microcosm: It will depart multiple buildings in a sprawling, suburban office park for a single, new-construction development in the mini-urban node of Conshohocken. Whoever buys those buildings, whether as part of the full portfolio or if they wind up taking only one of the office parks, will be looking for ways to update the property for the new paradigm.
CORRECTION, SEPT. 27, 4 P.M. ET: A previous version of this article misrepresented the nature of Anamis' expiring lease at Chesterbrook Corporate Center. This article has been updated.