by John Jordan and Antoinette Martin, GlobeSt.com
The 37-story A office tower 1818 Beneficial Bank Place, turned around from approaching foreclosure two years ago by Sovereign Capital Management Group Inc., is now for sale in a much healthier market as a trophy.
"We're extremely pleased with both the building's recovery and the renaissance taking place in Philadelphia's central business district," said Sovereign's CEO, Todd A. Mikles. "Philly's CBD is now experiencing considerable compression in cap-rates, along with significant increases in rents, occupancy, and price-per-square foot."
"We've already received tremendous interest and expect a robust bidding process and record-breaking pricing for this trophy Philadelphia asset," Mikles said.
San Diego-based Sovereign has retained Cushman & Wakefield to secure a buyer for the 1-million-square-foot property that includes a 408-space parking garage.
Despite its location at the intersection of 19th Street and Market Street - considered the corner "Main and Main," in Center City - foreclosure was imminent for the tower in 2012. Sovereign Capital stepped in at the moment of greatest distress to partner with tenant-in-common investors, inject fresh capital, and execute an aggressive leasing campaign focused on large tenant deals and long-term lease renewals.
In less than two years, occupancy was up 20% according to Mikles. The Sovereign executive says average annual lease rollover is projected at 10% through 2020.
Last year, three companies established corporate headquarters at 1818 Market: national retailer Five Below, Medical Guardian, and Beneficial Mutual Bancorp. Beneficial, Philadelphia's oldest bank, occupies 95,000 square feet, with a lease agreement that included naming rights to teh building and rooftop signage.
As of May 1, the renamed 1818 Beneficial Bank Place was 91% occupied by 63 tenants.
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