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Source: The Suburban & Wayne Times
Date: 16 March 2006
Two Tredyffrin office parks, including the landmark Chesterbrook facilities, were sold last week, resulting in a windfall of taxes for the township.
Fox Realty Company sold Chesterbrook and Glenhardie corporate centers to Pitcairn Properties of Jenkintown. Fox developed the sprawling Chesterbrook campus, which also includes residential and commercial development, along with the Township Building, in the 1980s.
The $251 million transaction will net the township more than $2.5 million in real-estate transfer taxes - it makes one percent from every transaction. The total amount budgeted for real-estate transfer taxes in 2005 is $3 million.
"That’s great news for the people of Tredyffrin Township. That $2.5 million less that has to come out of homeowners’ pockets to pay for services," said Supervisor Warren Kampf. "As the budget process comes this year, we’ll certainly factor that in."
Real-estate transfer taxes have generated lengthy discussion during previous budget talks in Tredyffrin. The township frequently exceeds the budgeted amount by a significant amount, and during the 2005 budgeting process. Supervisor Robert Lamina convinced the board not to levy a tax increase, since the township had a healthy general fund balance and was likely to exceed conservative transfer-tax estimates, which it did. Township Manager Mimi Gleason pointed out, however, that such transactions are impossible to take into account when planning the budget.
"We’ve had these [large sales] off and on with the Wyndham Hotel, Gateway Shopping and others," she said. "When we have something like that that changes hands, we see a big increase. The problem is, it’s hard to budget for it."
Pitcairn purchased 17 office buildings in Chesterbrook and Glenhardie. The sale does not include any of the residential or commercial properties, or any township-owned property. There is almost 1.3 million square feet of office space in the two complexes, which have welcomed new tenants in the past year after a serious downturn. Vacancy rates in the King of Prussia office market were around 18 percent for 2005 after reaching 25 percent the two previous years. That number was aided in part when pharmaceutical company Shire moved their U.S. headquarters to Chesterbrook. Other tenants include Centocor, Morgan Stanley and New England Life Insurance Co.
Pitcairn partnered in the acquisition with Frankfurt, Germany-based SEB Immobilien-Investment GmbH.
Representatives from Pitcairn did not return a call seeking comment.
References: The Chesterbrook Development, TE Quarterly, vol. 40 #1 (January 2003); Chesterbrook Saga: A Chronology, TE Quarterly, Vol. 40, #3 (July 2003).
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