Harbor Group Buys Philly Office Asset

Harbor Group International has purchased 500 N. Gulph Road, a 100,820-square-foot office property in Philadelphia’s King of Prussia suburb. Brandywine Realty Trust sold the asset, according to Yardi Matrix information, in a transaction brokered by CBRE’s Investment Sales and Capital Markets division.

Brandywine Realty Trust had previously acquired the asset in a portfolio transaction in 1996 from Radnor Advisors, alongside nine other commercial properties, the data provider shows.

Completed in 1979 and featuring floorplates ranging from 19,873 to 20,565 square feet, the five-story property is fully leased to UGI Corp., a natural gas and electric power distribution company. The office building serves as the company’s headquarters under a lease with 12 years remaining. The low-rise underwent redevelopment in 2018, which upgraded building systems and parking infrastructure and included a renovated amenity space.

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The office building is just off the Pennsylvania Turnpike, which connects Interstates 76 and 276 with U.S. Routes 202 and 422. Additionally, the property is adjacent to the King of Prussia Town Center shopping mall, and the CHOP Hospital. Downtown Philadelphia is 20 miles southeast.

Philly office investments stay low

Office investment sales in Philadelphia totaled $220 million year-to-date through May, according to a recent Yardi Matrix report, ranking the metro near the bottom among the 25 largest U.S. office markets. Trailing behind Philly were only Tampa, Fla. ($111 million), Portland, Ore. ($106 million) and Detroit ($5 million).

As of May, office assets in Philadelphia traded at an average price of $113 per square foot, well below the national figure of $213 and other major east coast metros, including Manhattan ($650 per square foot), Boston ($201 per square foot) and Washington D.C. ($182 per square foot).