Friday, March 30, 2018

O'Neill Properties to close soon on $50M+ deal for GSK property

By Natalie Kostelni  – Reporter, Philadelphia Business Journal

GlaxoSmithKline has officially entered into an agreement to sell its West Campus in Upper Merion to O’Neill Properties Group in a deal worth about $50 million.

GSK wouldn’t disclose the sale price, but sources familiar with the transaction indicate the property at 709 Swedeland Road is trading in excess of $50 million. It consists of 43 buildings totaling about 2.2 million square feet of office, lab and warehouse space.

The sale is expected to close early in the second quarter, said Frances DeFranco, a GSK spokeswoman.

The sale means that GSK employees working out of the west campus will be moved to the pharmaceutical company's other local facilities. GSK operates properties in Upper Providence as well as what is referred to as its Upper Merion East Campus, which is next door to the West Campus. The company also has an office at the Philadelphia Navy Yard.

“GSK will continue to occupy the Upper Merion West Campus after the transaction closes, and will be relocating a majority of employees to either Upper Providence or Upper Merion East over the next year,” DeFranco said.

The company will also keep its sterile manufacturing facility on the Upper Merion West Campus to support early phase development and clinical sterile drug product manufacturing, DeFranco said.

GSK has been evaluating and realigning its real estate for the last 10 years. In early 2011, the company announced it would relocate from Franklin Plaza in Philadelphia to the Navy Yard. In 2013, it informed employees that it would rearrange significant portions of its real estate in the western suburbs.

Those efforts would involve consolidating, closing and expanding some facilities over the next several years. Those plans have been or are now being realized. They entailed: 

Closing its Upper Merion West Campus and leasing back a portion for its pilot plant;
Not renewing a 200,000-square-foot lease at 2301 Renaissance Blvd. in Upper Merion;
Retaining and keeping operational Upper Merion East, which totals 760,000 square feet at 893 River Road. It also has plans for a 100,363-square-foot expansion to one of its buildings at the River Road plant; and
Investing $245 million at its Upper Providence facilities. It is reconfiguring its research and other spaces in Upper Providence to make them more efficient with an eye toward making it one of two global research centers. The company will conduct research for HIV and infectious diseases, oncology, cardiovascular and other areas from there.

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