Arborcrest Corporate Campus Sold for $143M

Columbia, Maryland-based Corporate Office Properties Trust (COPT) announced that it completed the sale of the Arborcrest Corporate Campus in Plymouth Meeting, Pennsylvania, for $143 million. The four-building office project was sold to San Francisco-based Spear Street Capital in a deal brokered by JLL. Terms of the deal were not disclosed, but Spear Street Capital said it has retained JLL to continue both leasing and property management.

"We are looking for distinctive properties with proven appeal to a broad array of tenants. In addition, we are drawn to situations with substantial value creation opportunities either through new leasing or additional development. Arborcrest has an impressive roster of existing tenants but also has the capacity for significant new development," John Grassi, CEO of Spear Street Capital, told CPE.

Located at 751, 721 and 731 Arbor Way, Arborcrest Corporate Campus is a sprawling property that was once solely occupied by Unisys; in 1997, Corporate Office Properties Trust entered into a sale-leaseback deal with the company. Since then, COPT has invested nearly $100 million into repositioning the property and creating a campus for multiple tenants. The campus consists of four operating properties totaling 654,000 square feet that are 100% leased, plus 785 Jolly Road, an approximate 190,000 square foot redevelopment opportunity, and 27 acres of additional land.

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JV Acquires Austin's University Park

Lionstone–Hermes Real Estate Venture, a joint venture of Houston-based Lionstone Investments and London-based Hermes Investment Management, announced that it has purchased University Park in Austin, Texas. the eight-story Class A office building was sold by San Francisco-based Spear Street Capital for an undisclosed sum; the property was developed several years ago by Andy Sarwal, who planned a $750 million mixed-use project on the site, which later stalled. The most recent valuation by the Travis Central Appraisal District priced the property at $40.8 million. The sale of the property was brokered by HFF.

"Changing user preferences and the shifting U.S. economy are driving forces behind the types of property that today's companies are seeking for the long-term growth of their businesses," said Lionstone Investments' CEO Jane Page in a statement. "The current generation is looking for office space that fosters creativity, collaboration, and connectivity. Real estate that supports inclusivity and community, while also being multimodal and environmentally conscious, is highly sought after. University Park is a prime example of the type of property that aligns with these trends."

Chris Taylor, Head of Private Markets at Hermes Investment Management, adds, "The acquisition of University Park is consistent with our long-term strategy to capture the benefits of investing in sustainable locations within growing markets. Austin's growth, along with companies expanding their presence in the region, has seen occupiers requiring world-class facilities to retain and seek new talent. Through our occupier-driven approach with our like-minded JV partner Lionstone, we are confident that this investment will be a success."

The 206,657 square foot building at 3300 N Interstate Hwy 35 was 94% leased at the time of sale, with major tenants including Google, WeWork, ESPN, and Evernote. University Park will continue to be lease managed by Aquila Commercial Properties, while TransWestern will provide property management.

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Gramercy Sells NJ Office Buildings to Spear Street for $299M

Gramercy Property Trust announced that it had closed on the sale of two office buildings in Jersey City, New Jersey for $299 million, or $349 per square foot, to San Francisco-based Spear Street Capital. Commercial real estate services firm Cushman & Wakefield brokered the sale of 70 Hudson Street and 90 Hudson Street, marking the largest New Jersey office deal this year. Before closing, Gramercy prepaid the mortgage debt on 70 Hudson, and Spear Street assumed the outstanding loan of $101 million on 90 Hudson.

"These are unique, irreplaceable assets, and this transaction is clearly the most significant deal to date in 2016,"said Andrew Merin, Vice Chairman within Cushman & Wakefield of New Jersey, Inc., who notes that his team had orchestrated a previous sale of the subject properties in 2011. "This is the only office availability greater than 200,000 square feet and the largest contiguous availability along the Hudson Waterfront. The new ownership will be able to capitalize on the market's strong leasing momentum and cyclically improving rents compared to Manhattan."

70 Hudson Street is a 409,272 square foot, 12-story office building originally constructed in 2000 and is currently vacant after Barclay's recent departure; Cushman & Wakefield are handling the leasing assignment of the property. 90 Hudson Street is also 12 stories tall and covers 418,046 square feet of space; occupancy information was not disclosed. The sale of both properties is part of Gramercy Property Trust's previously announced plan to dispose of select single and multi-tenant office assets.

For more news and information visit Blumberg Partners.