Philly Sears Demolition Makes Way for Office Project

Demolition crews, which have been working at the property for about two months, have begun tearing away the façade of the former Sears, Roebuck & Co. store on Admiral Wilson Boulevard.

The site, owned by Campbell Soup Co. of Camden, NJ, was acquired in June of last year for $3.5 million. The company plans to build an office park of between 250,000 square feet to 500,000 square feet at the property.

The building was built in 1927 and was home to Sears until 1971, when it closed. Since then it has been in progressive deterioration, worsened by a two-alarm fire in December, according to The Inquirer.

Campbell Soup officials say demolition work will be completed by the end of the summer. No start date has been set for construction on the office project.
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Commercial Real Estate Fundamentals Better (Video)

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Berk Buys Boyertown Bldgs for $2.5M

Berk Wiper Converting & Packaging acquired the industrial buildings at 400 E. 2nd St. in Boyertown, PA from Cooper Automotive Co. for $2.5 million, or about $9 per square foot. 

This sale involved two industrial building totaling 275,600 square feet. Both building were built in 1956 and are located in the Berks submarket of Philadelphia. 
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Flex Bldg Sold for $2.5M

Brickbox Investments LLC acquired the flex building at 5060 Ritter Rd. in Mechanicsburg, PA from the Hoberman Family for $2.5 million, or about $48 per square foot. 

This single-story, 52,525-square-foot property was built in 1997 on five acres in the Harrisburg submarket of Philadelphia. 
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Tremont Shopping Center Sold for $10.4M

BET Investments, Inc. acquired the Tremont Shopping Center at 2500-2544 Welsh Rd. in Philadelphia, PA from Korman Commercial Properties, Inc. for $10.4 million, or about $193 per square foot. 

The single-story 54,006-square-foot strip center was built in 1960 in the Northeast Philadelphia submarket. It is anchored by Planet Fitness. 
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American Service Corp Pays $3.5M for Exton Office

American Service Corp. acquired the office building at 100 Arrandale Dr. in Exton, PA from Brandywine Realty Trust for approximately $3.49 million, or $100 per square foot. 

The two-story, 34,931-square-foot property was built in 1996 in the Exton/Whitelands submarket of Chester County. 
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Liberty Property Strikes Deal To Buy 23 Million SF Cabot Industrial Portfolio for $1.5 Billion

In a strategic bid to shift its portfolio to the industrial property sector and away from suburban office, Liberty Property Trust (NYSE: LRY) announced it has agreed to buy the operating partnership of Cabot Industrial Value Fund III for $1.475 billion. 

The transaction, which is expected to close in October of of this year, will add approximately 23 million square feet and 177 properties to the Malvern, PA-based REIT's industrial holdings. Approximately 13 million square feet of the space is located in Liberty’s existing markets, while the REIT will enter 10 new markets as a result of the deal, including Atlanta, Dallas/Fort Worth and Southern California, which together comprise 21% of the portfolio. As of May 31, 2013, the Cabot Industrial portfolio was 93.3% leased to 436 tenants. 

"This acquisition is a compelling opportunity to increase both the size of Liberty's industrial platform and its scope," said William P. Hankowsky, chairman and CEO of Liberty. "With one transaction, we significantly deepen our current industrial presence while extending our footprint to a national level." 

Under the agreement, Liberty will assume approximately $230 million of outstanding mortgage debt. The REIT has obtained a commitment for a $1.27 billion senior unsecured bridge loan to swing the deal, with plans to arrange permanent financing through a combination of debt and equity financing. Liberty also said it plans to sell off certain properties to generate another $150 million. 

The acquisition, which has a $1.5 billion all-in price tag, will accelerate Liberty's shift away from the under-performing suburban office sector, and restructure its portfolio so that industrial property will account for more than half of its holdings. REIT analysts generally supported the deal for strategically repositioning the REIT to the industrial property sector using attractive current financing. 

"While a number of deals have recently commanded 'portfolio premiums,' this deal allows Liberty to meaningfully increase industrial exposure at a time when fundamentals are strengthening and values have been rising," noted Citi Research REIT analyst Michael Bilerman in a note to investors. "Investors are bullish on the US industrial sector, and there are relatively few ways to play this in the public REIT market in size. The question is, is there still enough runway in the industrial cycle for LRY to make money on this investment?" 

Bilerman sees opportunity for the REIT to improve NOI through its local market management approach (the portfolio is currently managed by a third party), but he said the impact from directly managing the properties will take time and the portfolio is 93% occupied. 

Citigroup and Goldman Sachs served as Liberty's exclusive financial advisors on the acquisition. 
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