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Equity Commonwealth Puts PNC Bank Building Under Contract

Property Expected to Close at $160 Million
January 24, 2018
Equity Commonwealth (NYSE: EQC) has entered a definitive contract to sell the PNC Bank Building at 1600 Market St. in Philadelphia, PA, continuing the firm's massive sell-off of its U.S. portfolio.

Subject to customary closing conditions and extensions, Equity expects the sale to close by Feb. 28 for $160 million, or approximately $194 per square foot. Proceeds from the sale, after credits and capital costs, contractual lease costs and rent abatements, are expected to net the firm approximately $156 million, according to a corporate release.

Local media outlets are reporting the buyer of the asset is Herndon, VA-based American Real Estate Partners.

Constructed in 1980 with a renovation completed in 1997, the 39-story, 825,968-square-foot, 4-Star office tower is located on eight-tenths of an acre in the Market Street West submarket of Philadelphia. The Energy Star-rated building offers numerous features including on-site banking, food service and management. It is currently 84 percent leased to a mix of tenants including PNC - Underwriting, Schnader Harrison Segal & Lewis LLP and McCarter & English LLP.

Equity Commonwealth, the Chicago-based, self-advised commercial office REIT led by American billionaire businessman Sam Zell and CEO David Helfand, sold almost $107 million worth of assets during the fourth quarter of 2017, including: a 15-building, 1.18 million-square-foot office portfolio in Moon Twp. and Pittsburgh for $71 million; the fully-leased, 131,000-square-foot building at 789 E. Eisenhower Pky in Ann Arbor, MI for $24.9 million; and a 175,000-square-foot industrial property at 33 Stiles Ln. in North Haven, CT for $10.5 million.

After going under contract on the PNC Bank Bldg. in December, Equity Commonwealth went under contract this month to sell the 1.57 million-square-foot office tower at 600 W. Chicago Ave. in Chicago, IL. Currently 98 percent leased and anchored by Groupon's world headquarters, the property is expected to close in March for a gross purchase price for $510 million. With the completion of its two pending deals, Equity Commonwealth will have grossed roughly $775 million in proceeds over the last two quarters.
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