Monday, July 8, 2019

Liberty Property Trust Doubles its Money on Center City Medical Office Tower

by John Jordan
Liberty Property Trust has sold a medical office building in Center City it developed six years ago, for just under $100 million, more than double what it cost to build the property.

The Wayne, PA-based firm sold 800 Walnut St., a 12-story 153,242-square-foot medical office building for $99.25 million to the University of Pennsylvania Health System. Liberty Property Trust developed the medical office tower in 2013 for $48.5 million.
The University of Pennsylvania Health System’s Penn Medicine Washington Square occupies the entire building. Penn Medicine Washington Square is home to more than 100 health care providers from a wide range of services, including cardiology, otorhinolaryngology (ear, nose and throat), primary care, surgery, urology, women’s health and more.

The “green” building features energy efficient heating and cooling, optimized day lighting, extensive recycling and storm water retention through a “green roof” terrace.
The University of Pennsylvania Health System could not be reached for comment at press time.

Liberty Property Trust reports it used a portion of the sales proceeds at closing to repay $35.9 million of mortgage debt encumbering the property and, consequently, will realize a loss on early extinguishment of debt of $7.6 million, or $0.05 per diluted share, in the second quarter of 2019. The debt extinguishment charge was not included in the company’s previously announced earnings guidance for 2019. The secured loan carried an interest rate of 4.84% and was scheduled to mature in 2033.

Earlier this year, Liberty Property Trust added to its Central New Jersey portfolio with the sale-leaseback acquisition of 75 Ethel Road in Edison, NJ for $12.2 million. The 101,454 square foot building features a 22-foot clear height and is strategically located along I-287 near Exit 10 of the New Jersey Turnpike.
Liberty also purchased 115 Moonachie Avenue, a “last-mile” property, in the Meadowlands for $39.6 million. The 168,800-square-foot multi-tenant building is 100% leased and features 28-foot clear height. It is immediately adjacent to three buildings Liberty previously acquired in two separate transactions in the Meadowlands.

Liberty Property Trust has been engaged in a strategy of exiting the commercial office sector and concentrating on the development, acquisition, ownership and management of superior logistics, warehouse, manufacturing, and R&D facilities in key markets in the United States and the United Kingdom. Liberty’s 108-million-square-foot operating portfolio services 1,200 tenants.

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