By Silverstein Properties | Official Press Release
Class-A Trophy Property in Philadelphia’s Central Business District
and One of the City’s Most Iconic Office Developments
PHILADELPHIA, March 27, 2019 – Silverstein Properties, Inc. (SPI) a full-service real estate development, investment and management company based in New York City, Arden Group (AG), a privately held real estate fund manager, investor, and operator based in Philadelphia, and Migdal Insurance, Israel’s leading insurance company and pension and provident fund manager, today 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.”
Built in 1990 and designed by Kohn Pedersen Fox Associates, 1735 Market Street is widely recognized for its trademark pyramid crowned top. The tower connects the city’s historical main street (Market 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 (Philadelphia Sports Club) 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, convenient access to one of the premier private clubs in Philadelphia. At the base of the building are two parks and a winter garden.
The Property’s 18th and Market Street location provides convenient access to all corners of Center City and the entire Philadelphia region. Nearly 300,000 people take public transportation into Center City every workday. The majority commute to SEPTA’s Suburban Station, located in the concourse directly below 1735 Market. Suburban Station is the only rail stop servicing the Market West office market, and ranks highest in SEPTA Regional Rail ridership.
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About Arden Group
Arden Group, headquartered in Philadelphia is a vertically integrated real estate fund manager focused on commercial real estate equity and debt investments in the top 25 U.S. MSA’s. Founded in 1989, Arden has acquired in excess of $4 billion of properties through joint ventures and its discretionary investment funds, and managed over $9 billion of commercial real estate assets. Arden Group has been ranked by Preqin for 2017 & 2018 as #1 globally “Most Consistent Closed End Private Real Estate Fund Manager for All Funds, All Strategies.” Visit www.ardengroup.com.
About Silverstein Properties
Silverstein Properties is a privately held, full-service real estate development, investment and management firm based in New York founded by Larry Silverstein. Silverstein Properties has developed, owned and managed more than 40 million square feet of commercial, residential, retail, and hotel space. Recent projects include 7 World Trade Center, the first LEED-certified office tower in New York City (2006), 4 World Trade Center (2013), the Four Seasons Downtown (2016), One West End (2017) and 3 World Trade Center (2018). The company has been recognized as one of the “Best Places to Work in New York City” by Crain’s New York Business for eight years in a row. For further information on Silverstein Properties, please visit: www.silversteinproperties.com or http://www.wtc.com.
About Migdal Insurance
Migdal Insurance, established in Jerusalem in 1934, is Israel's leading insurance, finance and pension group. Migdal is a key player in providing financial security to over 2 million clients who have entrusted us with their insurance protection in the fields of Life, Health, and General Insurance, as well as in management of their savings, investment, and pension funds. Visit www.migdal.co.il.
About Equity Commonwealth
Equity Commonwealth (NYSE: EQC) is an internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. Equity Commonwealth is based in Chicago, IL.
HFF and its affiliates operate out of 26 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform, including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc. (NYSE: HF). The HFF investment advisory team representing the seller included senior managing directors Doug Rodio and Coleman Benedict and managing director Brett Segal. For more information, please visit hfflp.com or follow HFF on Twitter @HFF.
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