Aramark Tower in Phila., Bishops Gate come on the market

by Natalie Kostelni

"Two major office properties have come up for sale in what may be a sign the local investment market is gaining traction.

Aramark Tower in Center City and Bishops Gate in Mount Laurel, N.J., are for sale and will test two different office markets appeal to commercial property buyers. They will also offer a glimpse into whether investors are willing to strike big office deals.

Property sales last year rose by 57 percent to $220 billion, according to Real Capital Analytics. Retail and apartment properties led the way, and office buildings struggled across the board. Locally, that was also the case. 1700 Market St. in Center City got sold but other buildings, such as the Curtis Center, Public Ledger and Two Penn Center, hit hurdles.

Aramark Tower is a 32-story, 620,000-square-foot office building at 1101 Market St. Girard Estate bought it in 2002 for more than $80.5 million. The property is fully leased, and its lead tenants are Aramark Corp., which makes its headquarters there and occupies roughly 60 percent of the building. The remainder of the offices are occupied by the city of Philadelphia, a law firm and other companies.

This isn’t the first time Girard has tried to unload Aramark. In 2007, Grasso Holdings tied it up in a deal valued at $101 million but that fell apart months later. The tower was pulled from the market as the credit freeze and recession worsened.

Now, Girard is willing to see if a buyer is interested in the building.

“As a fiduciary for the school, they are looking at this asset and trying to determine what the market will pay for it. At a certain price, they are a seller but like any well-capitalized owner, at a certain price, they are not.”

Since the investment market is still going through the process of being re-stabilized, it’s difficult to gauge how much Aramark might trade for though some have estimated it could command as much as $115 million.

The other property up for sale, Bishops Gate, is owned by iStar Financial, which bought the property in 2003 for $79.8 million. It’s a two-building complex referred to as Bishops Gate I and II and has a combined total 483,896 square feet. It sits within the Bishops Gate Corporate Campus. Both buildings are fully occupied by PHH Mortgage Corp., which uses the space as its headquarters for its 2,900 employees. PHH has more than 10 years left on its lease.

Bishops Gate I is at One Mortgage Way and totals 376,122 square feet. Bishops Gate II at 2001 Bishops Gate Blvd. totals 107,774 square feet. Both facilities were constructed in 1999.

“There are a lot of investors who like to buy properties that are net leased with 10 or more years,” he said. “They specialize in that type of business.”

The predictability of a complex such as this is what attracts them to buy it, he said.

Bishops Gate could sell for more than $90 million."
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