Wednesday, February 13, 2013

Rosemont Realty of Santa Fe, N.M., poised to buy 2000 Market St.

by Natalie Kostelni

Rosemont Realty of Santa Fe, N.M., is poised to buy 2000 Market St., a 29-story office tower in Center City, for about $110 million, according to people familiar with the transaction.
The acquisition is part of what many believe is a growing trend in Center City: Investors from outside the region are taking a serious look at putting money into Philadelphia real estate.
The last time 2000 Market St. traded was on New Year’s Eve 2009, while the economy was struggling and lenders continued to be tightfisted. Just a month earlier that November, RREEF, which had owned the 665,000-square-foot office building, voluntarily gave the building back to its lender, Prudential Life Insurance, in a deed in lieu of foreclosure.
CB Richard Ellis Investors, the pension advisory arm of CBRE Inc., stepped in. It bought the building for about $50 million, or $80 a square foot, a steep discount to the $77 million RREEF had paid in 2003. It had a $49 million mortgage with Prudential.
Between the time RREEF bought the property — when the commercial real estate market was climbing to a peak — and the time it relinquished ownership, 2000 Market had lost nearly $30 million in value.
Since buying the building, CB Richard Ellis Investors put $25 million into it, redoing the lobby, creating a large conference center in what had been a cafeteria and renovating common spaces. It also bought occupancy up to about 96 percent from 80 percent.

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