An office building on the northern edge of Delaware has been sold for nearly $62 million.
Medistar Corp. acquired a 264,000-square-foot office building at 3 Beaver Valley Road in Wilmington, Del., for $61.8 million, marking the first mid-Atlantic investment for the Houston-based developer and investor.
The Class A building is 94-percent occupied with Farmers Insurance Exchange as the anchor tenant.
Newmark Grubb Knight Frank Capital Markets represented both the buyer and seller, an entity controlled by KBS Realty Advisors, in the transaction.
“It is no surprise that this office building attracted multiple offers from a number of capable buyers across the country, given its well-established anchor tenant and proximity to many corporate headquarters,” said NGKF’s David Dolan, a senior managing director in the Philadelphia office, who arranged the transaction along with Executive Managing Director Jeffrey Mack and Senior Managing Director Michael Margolis in Wayne, Pa.; Senior Managing Director Neal Dangello in Wilmington; and Director Brett Segal in Philadelphia.
“3 Beaver Valley Road had been maintained by a leading institutional owner with the level of amenities associated with first-class properties and also will benefit from the quickly improving economy in the area,” said Dolan.
Built in 1995, the five-story property was recently improved with a renovated lobby, repaved parking lot and a new roof. The 18-acre site is next to Brandywine Creek State Park.
Farmers Insurance Exchange, one of the insurers that make up Farmers Insurance Group, renewed its 211,000-square-foot lease for 10 years in the fourth quarter of 2014, according to Mack, who, along with Dangello, served as exclusive leasing representatives for the building. The NGKF representatives also helped arrange the 39,121-square-foot headquarters lease with Solenis International during the first quarter of this year. Approximately 13,000 square feet remains available on the fifth floor.
The New Castle County North sub-market, where the office property is located, recorded the most absorption of any Wilmington sub-market last year at 270,608 square feet, according to NGKF research. Class A asking rents were also the highest of all submarkets at $29.65 per square foot.
Anchor for the 264,000 square foot building is 21st Century, an insurance company owned by Farmers. The building has more than 13,000 square feet of space available at a listing price of $22 a square foot.
The sale is another sign that the Brandywine Hundred north of Wilmington remains popular as an office location.
The Applied Bank Center, the former Rollins building high rise on the southern end of Route 202 (Concord Pike), is believed to be nearing full occupancy.
Just to the south, JPMorgan Chase snapped up the former South Campus of AstraZeneca and is now renovating the space for uses that include the complex serving as a technology hub for the financial services company. JP Morgan businesses that will move to the site have not been announced. JPMorgan Chase has been holding on to sites in Wilmington and the Newark area.
The company has added about 1,000 employees over the past year in various business segments and now has more than 8,000 employees. Wilmington is the headquarters for the company’s credit card business.
Last year, Wilmington-based Buccini/Pollin Group acquired the 305,000 square foot Bellevue Park Corporate Center for a reported $61.5 million.
Both the Bellevue and Beaver Valley buildings have blue chip tenants and good locations that can command higher sales prices. The price of Bellevue raised a few eyebrows at the time. However, based on the sale price of Three Beaver Valley, it appears that Buccini/Pollin may have gotten a good deal from the German company that owned the complex off Philadelphia Pike.
