By Natalie Kostelni – Reporter, Philadelphia Business Journal
5 hours ago
Kairos Real Estate Partners has sold a 124,000-square-foot office building in Blue Bell for $24.85 million after buying the property four years ago for just $3.3 million.
AFA Realty Partners, an affiliate of Apex Financial Advisors in Yardley, bought 518 Township Line Rd. It was 80% occupied at the time of sale.
The deal was initiated in December before the pandemic affected the global economy and state mandates closed nonessential businesses. AFA Realty put the property under contract with a non-refundable deposit and began due diligence in earnest. By February the transaction was on track and projected to close April 1. The date was set.
Confident in reaching the finish line though still hedging, AFA Realty spent $1 million to lock in a 10-year loan with Univest when interest rates dropped earlier this year. “I felt it was opportunistic,” said Robert A. Connell, CEO of Apex. “I was happy to get a low rate.”
In recent weeks, some real estate deals have started to falter or fall apart altogether. What had been a routine matter of getting documents signed has turned into complicated logistics amid physical distancing recommendations.
To complete the sale, Kairos President Stephen J. Gleason had to drive to the Jenkintown home of a representative from a title company involved in the deal. Standing on the front porch, the deed was signed and notarized.
“He was on one side of the storm door and I was on the other,” Gleason said. “It’s definitely memorable. I didn’t expect this to be challenging because it’s a pretty clean property, but then again no one expected COVID-19.”
Kairos and Artemis Real Estate Partners of Chevy Chase, Maryland, bought the property in 2016. At the time, the building was 27% occupied and had been foreclosed upon. “It was in great shape physically but had no amenities,” Gleason said.
Consistent with its strategy, Kairos spent $4 million making a series of renovations to the interior and exterior of the building and adding amenities including a café and fitness and training areas, which tenants seek out in office buildings. The company spent more money leasing and fitting out tenant spaces.
New tenants to the building include: RSM, a global accounting firm, for 45,000 square feet; Jefferson Blue Bell Surgery Center for 18,000 square feet; Ostroff Injury Law in 10,000 square feet; Skanska USA renewed on 11,000 square feet; Arraya Solutions leasing 8,000 square feet; and Mutual of Omaha occupying 5,000 square feet.
“We like the property,” Connell said. “It boarders 476 and we just think it’s a nice building." But then again, Connell said, he also "always gets a deal.”
Kairos continues to own a 150,000-square-foot building at 980 Jolly Rd. in Blue Bell and is on the hunt for its next deal.
Doug Rodio, Brett Segal and Brett Grifo of JLL represented Kairos and Artemis in the transaction.