CBRE Global Investors (GI) has purchased two Class A office buildings, United Plaza and 1650 Arch, located in Center City in downtown Philadelphia. The acquisitions were understood to be made on behalf of the Los Angeles-based real estate investment management firm’s latest US value-add fund, CBRE Strategic Partners US 7.
Terms of the transaction were disclosed, but CBRE GI bought the 27-story, 553,349-square-foot 1650 Arch for $102 million, while United Plaza, a 20-story, 617,476-square-foot office building, traded for $86 million, according to data provider Real Capital Analytics. The seller of both properties was TIER REIT, the Dallas-based commercial office real estate investment trust formerly known as Behringer Harvard REIT I.
“Philadelphia is a focus market for us and is projected to be a top 10 rent growth market over the next five years,” said Vance Maddocks of CBRE Global Investors, in a statement. “These buildings are high-quality properties in a market that is in high demand. With Class A vacancy at 9.1 percent and limited new supply coming into the market, we believe these properties will appeal to a wide range of tenants.”
Both properties are 94 percent leased to tenants, the largest of which include the US General Services Administration – Environmental Protection Agency and law firm Duane Morris. United Plaza, located on 30 S. 17th Street, and 1650 Arch, which were built in the mid-1970s and renovated in 2004 and 2011, respectively. CBRE GI intends to make upgrades to both buildings, including seeking Leadership in Energy & Environmental Design (LEED) certification and completing base building systems upgrades and cosmetic work.