Thursday, January 18, 2024

Dow Signs What May Be Philadelphia Market’s Largest Office Lease in More Than a Decade

 By Mark Heschmeyer CoStar News

David Werner Real Estate Investments signed an 800,000-square-foot, long-term lease extension with Dow at its life sciences and office campus in Collegeville, Pennsylvania, one of the biggest leases signed in the area in more than a decade.

It's the largest office lease signed in the Philadelphia market in the past 13 years. The deal surpasses what was previously the largest signing when David Werner and partner GreenBarn Investment Group finalized a $180 million sale-leaseback with a subsidiary of Pfizer for the same two-building campus last summer.

The extension includes the company's Northeast Dow Center at 400 Arcola Road, a significant research and development center for Dow.

The Bank of Montreal and Starwood Mortgage Capital co-funded a $95 million loan to finance the acquisition of the Arcola Corporate Campus, a 1.9 million-square-foot, Class-A mixed-use office and lab campus. The five-year loan was rolled into two commercial mortgage-backed securities offerings last year.

Dow leases a total of 927,828 square feet at the two-building campus. The global materials science company's lease was set to expire in December 2028 and has six, 6-year lease renewal options, according to CMBS documents backing the property loan. Dow subleases 20,642 square feet to Keller Williams and is marketing for sublease an additional 110,553 square feet of office space on its lease.

A representative for David Werner told CoStar News the Dow lease extension was not related to the extension options but did not provide additional information.

Wyeth Pharmaceuticals, a wholly owned subsidiary of Pfizer, leased back 677,311 square feet at 500 Arcola when the campus was sold to David Werner. Wyeth’s lease is set to expire on August 2028 with three, 1-year renewal options, according to CMBS documents.

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