Top real estate deals of this quarter
A cement plant, an iconic hotel, a corporate headquarters, two suburban hotels, a historic bank building and a city shopping center were among the million-dollar properties that changed hands in the first months of 2017, according to CBRE Research.
The high-dollar sales reflect deals that started in the third and fourth quarters of 2016, traditionally a busy time for commercial real estate, said Rick Kingery, the Collier’s International vice president who is managing the Corporate Commons sale, one of the largest this quarter.
“When you’re looking at property sales of that magnitude, it doesn’t start in the same quarter it transpires in. It’s a lagging indicator. The transfers you’re seeing in Q1 is the sales activity you saw in Q3 and early Q4,” Kingery said.
Here are some of the biggest deals:
Two Concord Pike hotels were sold for $17.75 million in a single deal – the 71-room Inn at Wilmington and the 78-room Courtyard by Marriott.
Manhattan-based Blackstone Group sold the hotels to New Jersey-based Pinnacle Hospitality Group. The buildings are adjacent to Concord Pike’s restaurant row. The Inn at Wilmington and the Courtyard sold for $15.9 million, but the deal came to $17.75 million with the addition of furniture, fixtures, and equipment.
Market Tower – $1.78 million
Market Tower at 901 N. Market St. sold at auction for $1.78 million. Westover Companies, the buyer, currently has engineers and architects evaluating the 125-year-old building, which sold for $15.99 per square foot, far less than other Market Street office buildings.
“One of the reasons we went after it was that it seemed like an appropriate price, but there is a lot of work that needs to be done, and we’re on it, ” said David McManus of Westover.
Although the building was marketed as a good prospect for a residential conversion and Westover owns nine apartment complexes in Delaware, McManus said the current thinking is to keep the building commercial.
“We’re evaluating it. Our plans are a little bit uncertain, but I think the expectation at this time is it will remain commercial,” he said. “The older part, the original Equitable Trust Building, was a spectacular building in its day, but right next to it, as part of the same building, you have this 1950s or 1960s architecture. How you modify it to look like one unit is a challenge.”
The tower started out life as the Equitable Guarantee and Trust Company Building in 1893. It boasted “burglar-proof” and “fireproof” safes fashioned of iron, concrete and chrome steel, a separate safe deposit room for ladies dubbed the “Ladies Parlor” and a penthouse apartment for the building’s janitor and his family, according to Edward Richi of the Delaware Historical Society.
Market Tower’s original buff brick skin was covered over in successive renovations, so the building was overlooked when several younger Market Street addresses were listed on the National Register of Historic Places.
McManus said Westover’s next step will be based on engineers’ and architects’ evaluations. “We’re excited about it. It is a new type venture for us. We have apartments in Delaware but we had not had any commercial space,” he said. “Residential seems to be the hot thing down there at the moment, but we believe that, with that, office benefits as well.”
Corporate Commons – $7.85 million
Incyte Corp., now building a four-story, 154,000-square-foot office building on the east side of its headquarters in the old Wanamaker’s building, paid $7.85 million for the small brick buildings on its west side – the ones that currently house Papastavros Medical Imaging and a string of physician’s offices.
The sellers were Berman Delaware Properties and Augustine 4 LLC. Musi Commercial Properties handled the deal.
Incyte bought the building that houses Paul Campanella’s Auto and Tire in a separate deal in December.
A trio of Class B properties in Corporate Commons drew interest from local investors and out-of-state bidders when it went to auction in January, according to Rick Kingery, the listing broker. The buildings at 11 Reads Way, 13 Reads Way and 15 Reads Way were purchased by Reads Way LLC, a group of local investors who paid $9.2 million
The three buildings, totaling 126,395 square feet, house companies such as Christiana Care, Dade Behring and Bayada Health. Taken as a unit, they are 82.3 percent leased, with a net operating income of $1.2 million annually, Kingery said.
Steel plant to rehab center – $1.5 million
Claymont Properties LLC sold the former Evraz Steel headquarters building on Philadelphia Pike to Gaudenzia Foundation for $1.15 million. The nonprofit has budgeted $1.5 million to turn it into a first-floor drug-and-alcohol rehab center and a second-floor supervised sober-living program for mothers and their children.
David Slinger of Gaudenzia said the nonprofit plans to turn the first floor of the 18,000-square-foot building into a 16-bed residential unit for drug and alcohol treatment and use the second floor for a supervised and monitored sober-living program for women residents and their children.
He said Gaudenzia has budgeted $1.5 million to renovate the existing building, and they are now evaluating bids for the work. Construction should begin this month or next, he said.
Buccini/Pollin Group, owner of more than 40 properties in Wilmington, bought the landmark 217-room Hotel du Pont and the Chemours headquarters building. BPG did not disclose the price, but county records indicate it was $32 million.
BPG said Chemours will lease back about 260,000 square feet of space in the building for 17 years. The headquarters was among Wilmington’s first high-rises when it opened in 1908, and it’s still the largest mixed-use building in Delaware.
Buccini/Pollin plans to preserve its circa-1913 theater and its celebrated Green Room restaurant. The company will modernize the offices and deliver an open-plan headquarters space for Chemours. It will also add a food court and about 180 luxury apartments with their own dedicated lobby entrance on Tenth Street.
“As somebody who has lived here all his life I’m pleased that hotel remains in local control, because our principals understand how important that property is to the community,” said Michael J. Hare of BPG.
Wyoming concrete plant – $1.25 million
Pennsy Supply of Harrisburg, Pennsylvania, sold a concrete plant in Wyoming in Kent County for $1.25 million.
E&D Holdings LLC, whose principals are Fredrick Ellingsworth and Francis DiMondi, bought the 43.3-acre site at 140 Southern Blvd.
Paul Salisbury of Pennsy said it was a surplus plant for the company that owns eight concrete plants or stone depots in Delaware. “When the economy turned down, we consolidated operations and this was just an idle plant for us,” he said.
Christina Crossing Retail Center – $29.3 million
Cedar Realty Trust paid Buccini/Pollin $29.3 million for the 138,000-square-foot Christina Crossing Retail Center, anchored by a 60,000-square-foot ShopRite. Cedar Realty of Port Washington, New York, is a public real estate investment trust with grocery-store-anchored shopping centers from Boston to Washington, D.C. The parties handled the deal in-house.