EOP Sells $172M Stake in Philly Towers; Spends $100M in San Diego, Austin

CHICAGO-Equity Office Properties Trust spent nearly $100 million on office acquisitions in San Diego and Austin, TX, while reducing its presence in the Philadelphia market by selling a majority ownership interest in two buildings there to another Chicago-based company for $172.2 million. Transwestern Investment Co., LLC, through its $680-million Aslan Realty Partners II, becomes majority owner of the 1.5-million-sf 1601 & 1700 Market St. in Philadelphia’s Market West office corridor.

The largest US office REIT paid $70.5 million for the 227,570-sf La Jolla Executive Tower in the San Diego market and another $28.6 million for the 178,777-sf, four-building Westech 360 office complex in Austin. While paying $309 per sf, Equity Office Properties acquires the 15-story La Jolla Executive Tower 75.5% leased. The price was $160 per sf for Westech 360, which is 92% leased. (For more on the local angle on the San Diego deal, click here.)

The acquisitions expand Equity Office Properties’ San Diego portfolio to 2.5 million sf in 18 buildings while its Austin holdings now total 1.6 million sf in seven buildings. Meanwhile, it still owns 2.5 million sf in 13 Philadelphia buildings.

“We have owned retail and multifamily properties in Philadelphia in the past and have been targeting office properties in the area for some time,” explains Transwestern senior vice president of acquisitions Kevin Hites of his company’s strategy. “The properties are situated in a prime center city location, offer an abundance of amenities and have an excellent tenant base.”

KMPG; Swartz Campbell LLC and Radian Guaranty Inc. are among the tenants at the 36-story, 681,000-sf 1601 Market St. tower. Deloitte Touche, AIG and Commonwealth Land Title head the tenant roster at the 32-story, 841,172-sf 1700 Market St.

With the ownership change, Grubb & Ellis takes over as exclusive leasing agent for 1601 and 1700 Market St.