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| 833 Chestnut, Center City, Philadelphia |
PHILADELPHIA, PA, May
19, 2015 – Holliday Fenoglio Fowler, L.P. (HFF) announced today that it has
closed the sale of 833 Chestnut, a
12-story, 705,061-square-foot medical office building across from Thomas
Jefferson University Hospital (TJUH) in Center City, Philadelphia.
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| Mark Thomson |
HFF marketed the property on behalf of the seller, Digital
Realty Trust. A publicly-traded
healthcare REIT purchased the asset for $160.75 million.
Originally built in 1928 as an addition to the original
Gimbel Brothers retail department store complex, 833 Chestnut was substantially
renovated and is currently 92 percent leased.
The property’s major tenants include Thomas Jefferson
Hospital, JUP, Thomas Jefferson University, Nemours Children’s Clinic, the U.S.
Government and Ballinger Company.
The
total GLA includes approximately 60 percent clinical use, which continues to
grow year-over-year.
The HFF investment sales team representing the seller was
comprised locally of senior managing directors Mark Thomson, Andrew Scandalios and Jose Cruz, and nationally by
managing directors Michael Bennett and
Philip Mahler who are team leaders of the medical office building group
within HFF’s national healthcare practice.
“833 Chestnut is an excellent example of the synergies that
exist between HFF offices. Our local
team realized it was more than just a general office deal; we enlisted the help
of our healthcare group, put the best team on the field, collaborated keeping
the client’s best interests in mind, and ultimately secured significant
proceeds over and above for what a general office might have traded,” said
Scandalios.
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| Andrew Scandalios |
“We marketed this asset to all of the typical office buyers
in the northeast but the demand for medical office simply priced those groups
out of the market,” added Thomson.
“We had significant interest from all the ‘usual suspects’
in the medical office building space, as well as private equity, pension fund
advisors, and even some foreign capital.
"The size of the property can really move the needle for some of these
groups. Pricing was aggressive, and this
transaction is a testament to how accretive the current MOB market is for
sellers,” added Bennett.
“TJUH and its affiliates has significantly increased its
presence in 833 Chestnut over the last seven years and now is the anchor tenant
in the building, leasing over 50 percent of the net rentable area.
This significant hospital-related tenancy
created an opportunity for a medical office investor to develop a strategic
relationship with TJUH which tremendously increased competition for this
asset,” said Mahler.
For a complete copy
of the company’s news release, please contact:
Kristen M. Murphy
Associate Director
HFF | One Post Office Square, Suite 3500 | Boston, MA 02109
Main: 617-338-0990 | Direct: 617-848-1572 | Cell:
617-543-4873 | www.hfflp.com
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