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Deals & Dealmakers

Silverstein JV buys $450M Philly tower

Silverstein Properties, has partnered with Philadelphia-based Arden Group and Migdal Insurance, and Israeli pension and provident fund manager, to purchase and manage 1735 Market Street.

The trio paid $451.6 million for the 1.3 million s/f, 54-story, trophy Class A office building in Philadelphia.

HFF marketed the property on behalf of the seller, Equity Commonwealth, 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 and law firms Ballard Spahr and Montgomery McCracken Walker & Rhoads.

Craig A. Spencer, CEO of Arden Group, said, “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.”

Built in 1990 and designed by Kohn Pedersen Fox Associates, 1735 Market Street is recognized for its trademark pyramid crowned top.

The tower connects the city’s historic main street to Comcast’s global headquarters campus directly across JFK Boulevard. It is Philadelphia’s only trophy building with direct access to public transportation and a tenant-only, underground parking garage.

The building also features a newly renovated fitness center and the recently completed Lounge @ 1735 Market, a tenant-only amenity floor that offers a blend of shared work space, conference rooms, lounge space, entertainment areas and outdoor space.

On the 52nd floor of 1735 Market is the Pyramid Club, which allows paying members, including both tenants and visitors, access to a private club. At the base of the building are two parks and a winter garden.

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