Wednesday, January 27, 2021

University City Science Center puts building up for sale amid 'insatiable' demand

Natalie Kostelni Reporter Philadelphia Business Journal 

The University City Science Center has put up for sale 3701 Market St., an 8-story, 141,000-square-foot office building that is mostly leased to Penn Medicine.

The building, developed in 2000, is fully leased and expected to sell for upwards of $80 million.

The Science Center has from time to time sold buildings to users such as Monell Chemical Senses Center and Children’s Hospital of Philadelphia, but it considers now is a particularly good time to try to sell 3701 Market.

“It’s a very much sought-out asset class,” said Curt Hess, senior vice president of real estate at the Science Center. “It’s an opportune time to sell.”

Investor interest in real estate leased to life sciences and medical tenants has increased during the pandemic. While that has contributed to investor attention so has the uncertain future of traditional office space.

“The current appetite for science-focused real estate globally is really insatiable,” said Robert Fahey, an investment broker with CBRE Inc. who is marketing 3701 Market for sale. “Capital from around the world is pursuing these assets for a couple of reasons. They are considered low risk and low volatility and the aging population is driving the health of that sector and the need for science to create cures for all sorts of ailments.”

The plan is to pour any proceeds gained from the sale of 3701 Market back into the Science Center’s programs, Hess said.

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