Silverstein Properties, Arden Group and Migdal Insurance announced that they have entered into a partnership to purchase and manage 1735 Market Street, a 1.3 million sf, 54-story, trophy Class A office building in Philadelphia.
Arden Group, Silverstein Properties and Migdal purchased the building, located on 18th Street between Market Street and JFK Boulevard, for $451.6 million from Equity Commonwealth.
HFF marketed the property on behalf of the seller and procured the buyer. Skadden Arps and Cozen O’Connor acted as purchaser’s legal counsel, and Locke Lord acted as seller’s legal counsel with JLL arranging the debt financing.
“I am thrilled to begin the year with the addition of this great building in one of my favorite cities,” said Larry Silverstein, Chairman of Silverstein Properties. “I hope that through our investment in the building, we can continue to attract top-tier companies to Philadelphia and drive Center City forward as a major business hub in the United States.”
The tower, Philadelphia’s fifth-tallest building, is currently 92 percent leased to tenants including Bank of New York Mellon Corp., Goldman Sachs Group, Boston Consulting Group, JP Morgan Chase & Co., Willis Towers Watson, and law firms Ballard Spahr LLP and Montgomery McCracken Walker & Rhoads LLP.
“The building’s impressive roster of tenants, and prime location in the heart of Philadelphia attracted us to this opportunity,” said Marty Burger, CEO of Silverstein Properties. “The city is a global destination that continues to attract businesses. This acquisition marks our company’s expansion to a global destination and transit-oriented market outside of New York City. We look forward to working closely with Craig Spencer and the greater Arden organization. With more companies locating in Philadelphia and the tower’s reputation and strategic positioning, this investment offers great potential for long-term growth.”
“We are pleased to have acquired this premier investment in a robust market. Philadelphia’s dynamic job growth, millennial population growth and residential migration into Center City has created an exciting investment environment,” said Craig A. Spencer, CEO of Arden Group. “Having developed the Ritz Carlton Hotel and the Residences at the Ritz Carlton, the acquisition of 1735 Market Street marks another trophy investment in our hometown of Philadelphia. The purchase is consistent with our strategy of investing in opportunities for value creation. Silverstein and Arden’s combined strategic asset management oversight will allow us to achieve our operational goals as well as enhance appreciation of the asset over time.”
“1735 Market is another foundation stone in Migdal’s portfolio of long term holdings, and in line with our strategy to acquire best-in-class properties together with best-in-class partners,” said Jonathan Ross, Head of International Real Estate for Migdal. “1735 Market is the best multi-let building in Philadelphia’s CBD. It is centrally located, has a very high quality tenant roster, and features direct underground access to mass transit. This is Migdal’s third investment with world-class operator Silverstein Properties. Philadelphia-based Arden properties rounds out the partnership with local market expertise.”