Valley Forge Office Center for Sale Near Philadelphia

Thursday, November 3, 2016

Holliday Fenoglio Fowler, L.P. (HFF), on behalf of the owner, is marketing for sale Valley Forge Office Center, a three-building, 257,460-square-foot, value-add office property located at 480, 500 and 656/676 East Swedesford Road in Wayne, Tredyffrin Township, Chester County, Pennsylvania, near Philadelphia. The commercial property for sale sits on 19 acres with close proximity to the recently-expanded King of Prussia Mall and King of Prussia Town Center.

Situated along Swedesford Road in tax-favorable Tredyffrin Township, Valley Forge Office Center is ideally located at the confluence of Pennsylvania Routes 202 and 422, Interstate 76 and the Pennsylvania Turnpike, four of the region’s most heavily-traveled roadways, offering easy access to all the amenities found in a true work-live-play environment. Already widely regarded as one of the best locations in Greater Philadelphia, tenant demand should continue to increase along the Swedesford Road corridor as exciting mixed-use developments and redevelopments approach completion nearby.

The center is currently 83.9 percent leased with an average weighted lease term of approximately 5.6 years in a micromarket that boasts a 8.4 percent direct vacancy rate and trophy asking rents surpassing $35 per square foot. Due to this, Valley Forge Office Center offers significant upside in the near-term through a well-executed lease-up plan that will bring its performance up to the level of its competitive set.

Suburban Office Center for Sale Investment Benefits

  • Class A Product with Upside Potential:  Since acquiring Valley Forge Office Center in 2005, the current ownership has demonstrated an institutional level of maintenance and management. The property has undergone approximately $17.7 million in capital improvements, including but not limited to re-faced exteriors, a new atrium connecting the 656/676 building, upgraded HVAC systems along with exterior and interior improvements to lobbies and common areas. Additionally, a fitness center was added as well as an outdoor patio and a full-service cafe. A new owner has the ability to make additional common area improvements to 480 and 500 East Swedesford Road, which could bring those buildings up to the top end of the current Class A standards and result in higher rental rates in line with those found at 656/676 Swedesford and other properties within the immediate vicinity.
  • Strong Tenancy:  Valley Forge Office Center is currently 83.9 leased with an average weighted lease term of approximately 5.6 years, which provides security of income with the ability to push rental rates as the location further improves with the completion of the mixed-used developments nearby. Tenants come from a variety of industries with a concentration of medical, distribution and financial sectors. This diverse mix provides surety of income and predictable cash flow and limits exposure to any particular segment of the economy.
  • Main and Main Location:  Valley Forge Office Center is ideally located at the confluence of four heavily-trafficked roadways. The office campus for sale’s location is highlighted by its easy access to Philadelphia’s Main Line, a series of affluent and extremely-desirable communities in close proximity to Philadelphia located along Lancaster Avenue from Lower Merion to Exton. This puts Valley Forge Office Center in close proximity to the largest concentration of executive housing in the Philadelphia region. Valley Forge Office Center is located in Tredyffrin Township, one of the most desirable office markets in the region from a tax perspective. Tredyffrin Township offers businesses some of the lowest business privilege taxes in the region, charging businesses a minimal $52 per employee. Nearby Upper Merion Township (King of Prussia), where most of the property’s competitors are located, charges businesses a significantly higher business privilege tax of $1.50 per every $1,000 of gross receipts.
  • King of Prussia/Wayne Office Submarket: Valley Forge Office Center is part of the King of Prussia / Wayne submarket, the largest and most desirable office market in suburban Philadelphia. The submarket consists of 13.1 million square feet of office space in 249 buildings, and its appeal is attributed to its unrivaled access to the entire Philadelphia region. The commercial property for sale near Philadelphia competes within the Swedesford Road micromarket, one of the top performing submarkets within the entire region, achieving some of the highest rental rates with one of the lowest vacancy rates. The micromarket consists of 15 buildings totaling approximately 1.8 million square feet and boasts a direct vacancy rate of 8.4 percent as of September 2016. Given the superior infrastructure, road system, supporting retail and its convenience to a large labor pool, King of Prussia / Wayne and the Swedesford Road market should continue to maintain its position as the largest and most desirable office market in Greater Philadelphia.

Valley Forge Office Center is an 83.9 percent leased, Class A commercial property for sale near Philadelphia. The office center has strong tenancy, a main and main location in the highly sought after King of Prussia/Wayne office submarket. For more information on this or other office complexes for sale in Greater Philadelphia, contact HFF Senior Managing Director Doug Rodio, Managing Director Brett Segal, Director Ben Appel or Senior Managing Director Jose Cruz.

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