Suburban building breaks price record

by Natalie Kostelni

LaSalle Investment Management bought a medical office building at Ellis Preserve here for $50.5 million, or roughly $388 a square foot, which is the highest price ever paid for a suburban office property in the Philadelphia region.

The sale blew out an earlier record set in 2005 when 300 Four Falls, a 290,000-square-foot office property in West Conshohocken, traded for $100 million, or $340 a square foot.

The 130,000-square-foot building at Ellis Preserve was constructed in June 2007 for Main Line Health. The health system’s affiliate, Main Line Hospitals Inc., then signed a 15-year lease on the building. BPG Properties Ltd. of Philadelphia built the structure and was the seller in this transaction. Current demand for medical office buildings was one of the drivers leading BPG to sell the property, said Steve Spaeder, president at BPG’s affiliated BPG Development Co.

Investors have taken a liking to medical office buildings and their sales have increased by 18 percent over the last year, according to Real Capital Analytics data. In addition, the sales price has increased. During the second quarter, the average sale price was $210 a square foot and now it’s at $218 a square foot, according to Real Capital Analytics.

The property known as the Main Line Health Center at Ellis Preserve is considered the ideal in what investors are seeking these days in commercial real estate.

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