King of Prussia office building off Gulph Road trades for $25.8M

A real estate company from Rehoboth Beach has acquired 211 S. Gulph Road, a 102,204-square-foot office building in King of Prussia, for $25.8 million, or roughly $250 a square foot.

This marks Jack Lingo Asset Management’s entrée into the Philadelphia office market. About a year ago, the company added office properties to its overall investment strategy, said Doug Motley, a principal at the firm.

The company decided with office use influx as a result of the pandemic and remote work, there would be increased opportunities to make some acquisitions. “Office has become an out of favor asset,” he said.

Jack Lingo Asset Management is focusing on seven markets from Philadelphia down to Charleston, South Carolina, and the South Gulph Road property is its second office acquisition. It intends to buy mostly in the suburbs though “if the right opportunity presented itself, we would go downtown,” Motley said. “We really like the secondary and tertiary markets in the larger markets.”

The company is targeting acquisitions in the $40 million to $50 million range and it intends the hold properties for the long term.

As for 211 South Gulph, the property, with multiple tenants and stabilized, fit right into what it’s looking for. “King of Prussia is one of Philadelphia’s hottest submarkets,” Motley said.

Mike Margolis of Newmark arranged the transaction.

Roseview Group of Boston was the seller. The company bought the Gulph Road building in 2015 for $21 million and as part of a fund that was focused on buying office properties.

Sales of suburban office buildings have picked during the first half of the year and the sale of 211 S. Gulph adds to that growing trend. For example:

• Balashine Properties of Blue Bell bought the Valley Forge Office Center, a two-building office complex off at 500 E. Swedesford Road and 480 E. Swedesford Road in Wayne, for a combined $20 million;
• E. Kahn Development Co. paid $24 million for 760 Moore Road, a vacant 260,000-square-foot building in King of Prussia;
• QVC’s parent company, Qurate Retail Group, sold a 256,500-square-foot office building at 1365 Enterprise Drive in West Chester for $17.5 million;
• Keystone Property Group sold a stake in a new 429,122-square-foot headquarters for Amerisource Bergen in Conshohocken for $340 million;
• At the beginning of this year, Brandywine Realty Trust sold an interest in several of its suburban office buildings to Davidson Kempner Capital Management, a New York in a deal valued at $100 million; and
• At the end of last year, Spear Street Capital sold a 90% stake in Arborcrest for $225 million. Saudi Arabia-based Sidra Capital bought a 90% interest in the five-building, 855,600-square-foot office complex in Blue Bell.

When Roseview bought the Gulph Road building six years ago, it was fully occupied. It wasn’t long after that Accenture, which was the anchor tenant leasing about 60% of the building, vacated its space. In early 2018, Qlik, a data analytics company, signed a 10-year lease on 62,000 square feet at the Gulph Road building and backfilled the vacant Accenture space.

In that time, King of Prussia has increasingly become a hotbed of development and real estate investment.