Keystone Property Group, Mack-Cali and Parkway Corporation Acquire Class A, 400,000-SF Philadelphia CBD Office Building
12/09/2013 Category: Acquisitions
Reinvestment Strategy for 100 Independence Mall West Includes Addition of New Parking Garage and Common Area Upgrades
Exciting Changes Coming to 100 Independence Mall West
Philadelphia, Pennsylvania—December 9, 2013—A joint venture partnership of Keystone Property Group, Mack-Cali Realty Corporation and Parkway Corporation (“the Partnership”) today announced that it has acquired 100 Independence Mall West for approximately $40.5 million. The nine-story, approximately 400,000-square-foot Class A office building is prominently located in one of Philadelphia’s most desirable office submarkets directly across from the historic Liberty Bell, the National Constitution Center and Independence National Park. The Partnership purchased the property from an affiliate of The Dow Chemical Company (“Dow”).
The building is 85-percent leased to two tenants: Dow, which occupies 173,000 square feet as its Northeast headquarters; and the General Services Administration of the United States (GSA), which will occupy 135,715 square feet commencing July 2014.
As part of a more than $20-million reinvestment strategy for the property, the Partnership is planning upgrades to the building’s common areas, as well as the build-out of the GSA’s offices and the conversion of approximately 55,000 square feet of lower-level space into a 110-stall parking garage that will be managed by Parkway.
“This transaction is our first downtown Philadelphia office acquisition and is a key step in our strategy to significantly expand our footprint and create economies of scale throughout our Pennsylvania portfolio,” stated Bill Glazer, president of Keystone Property Group. “The location of 100 Independence Mall West in the heart of the city’s Central Business District, as well as the quality of the tenant base, make this an attractive asset. This deal also affords us the opportunity to create significant value through the strategic repositioning of the building’s currently vacant, below-grade space.”
Mitchell E. Hersh, president and chief executive officer of Mack-Cali, commented, “We’re thrilled to be able to take advantage of strategic growth opportunities through our relationship with Keystone. Together we will be able to increase the property’s revenue potential and value.”
Boasting 40,000-square-foot, highly efficient floor plates on the office floors, as well as cityscape views on all sides, the building features several on-site amenities including a full-service restaurant for employees on the lobby level and an executive covered parking area.
Currently, approximately 3,000 square feet of retail space at the corner of 6th Avenue and Market Street is available for lease. Due to the building’s 40-foot setback, the corner retail unit is ideally suited for an eatery with outdoor seating.
Situated in one of the city’s most historic neighborhoods, the building benefits from the surrounding retail base along Market, Chestnut, Sansom and Walnut streets, as well as numerous nearby dining and hotel facilities. Multiple modes of mass transit are within walking distance of the building, including SEPTA bus service, and several major thruways are proximate to the property, including Interstates 676 and 95.
"We are very excited to be partnering with Keystone and Mack-Cali on this project because we consider it to be a diamond in the rough,” stated Robert Zuritsky, president of Parkway Corporation. “We believe that after we add public parking and other enhancements to 100 Independence Mall West, it will become a new important asset for the neighborhood and the city."
The Partnership was represented in-house in the transaction, while the CBRE team of Robert Fahey, Jerry Kranzel, Lizann McGowen and George Cauffman represented Dow.
About Keystone Property Group
Keystone Property Group is a leading real estate investor and developer, with offices located in Bala Cynwyd, Pa.; Chicago, Ill.; Miami, Fla.; and New York, NY. Keystone also sponsors and manages a series of opportunistic real estate investment funds. Keystone creates value for its investors through development, redevelopment, financing, leasing, property management and asset management. The company has been recognized by Inc. 500 magazine, the Entrepreneurs’ Forum and the Wharton Small Business Center, and several of its projects have earned “Best Real Estate Awards” from the Philadelphia Business Journal and BOMA (Chicago). For more information, please visit www.keystonepropertygroup.com.
About Mack-Cali Realty Corporation
Mack-Cali Realty Corporation is a fully integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, construction and other tenant-related services for its class A real estate portfolio. Mack-Cali owns or has interests in 277 properties, consisting of 267 office and office/flex properties totaling approximately 31.1 million square feet and ten multi-family rental properties containing over 3,400 residential units, all located in the Northeast. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of commercial and residential tenants.
Additional information on Mack-Cali Realty Corporation and the commercial real estate properties and multi‑family residential communities available for lease can be found on the Company’s website at www.mack‑cali.com.
About Parkway Corporation
Parkway Corporation is a family-owned business with over eighty years of experience in parking management and real estate development. Today Parkway, the largest parking company headquartered in Pennsylvania, is a fully integrated real estate firm that acquires, develops, owns, and manages parking, office, residential, hotel and retail properties in prime urban locations. Parkway’s geographic reach currently extends from Toronto, Ontario to Richmond, Virginia to Canton, Ohio, with over 60 locations encompassing nearly 20,000 spaces in six markets, including 23 parking garages, 37 parking lots and approximately 3,400 metered parking stalls.
Parkway is distinguished from other real estate investment and development companies by its primary focus on parking as a major component in its development projects. Parkway currently owns or long term leases better than one half of the facilities it operates, and remains one of the very few major parking players to develop its own sites. Parkway’s history of maximizing returns and minimizing expenses through automation, design efficiency, revenue control and management, without sacrificing service, has solidified its position as an industry leader.
Statements made in this press release may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as “may,” “will,” “plan,” “potential,” “should,” “expect,” “anticipate,” “estimate,” “continue,” or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which Mack-Cali Realty Corporation ("MCRC") cannot predict with accuracy and some of which MCRC might not even anticipate, and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Disclosure Regarding Forward-Looking Statements” and “Risk Factors” in MCRC’s Annual Reports on Form 10-K, as may be supplemented or amended by MCRC’s Quarterly Reports on Form 10-Q, which are incorporated herein by reference. MCRC assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.