Advalurem Group Joint Venture Acquires Yardley PA Office

Advalurem Group has acquired an ownership interest in 1000 Floral Vale, a class A, LEED Gold-certified office building located in Yardley, PA.

1000 Floral Vale is the newest and most sophisticated building in its submarket.  Built in November 2009, the 89,000 square-foot office building meets institutional, energy-efficient and environmentally safe design standards, earning it a LEED Gold certification, among other accolades.

The property is located in Lower Makefield Township, a high-income demographic area of northern Philadelphia, proximate to many employment demand drivers, transportation networks and commercial retail nodes.

“This is an area that grabbed our attention,” says Gabriel Pozo, principal and founder of Advalurem Group. “Lower Makefield Township is one of Philadelphia’s more prominent submarkets. It is ranked the #1 wealthiest area in Pennsylvania and is consistently featured in CNN/Money’s top rankings of ‘Best Places to Live’ in the U.S.”

The property is currently 80% leased; primarily to two ‘investment grade’ tenants on long-term leases with extension options.  All tenants entered into lease agreements post-recession and represent first generation space at market terms.  The business plan calls for the absorption of available space and moderate exterior capital improvements to enhance the user experience and marketability of the Property.

Advalurem Group’s local partner negotiated an attractive going-in yield and $214 per square foot due to the seller’s need for liquidity.  The purchase price represents a significant discount to replacement cost as valuations were much higher during the last real estate cycle.  The re-setting of basis from the developer’s building costs allows Advalurem Group and its local partner, Pembroke Hobson, an opportunity to competitively price the remaining space, leading to stable cash flow and upside pricing potential.
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