June 12, 2019 2018 – Holliday Fenoglio Fowler, L.P. (HFF) announced today that it has closed the sale of 1740 South Street, a 50,000-square-foot, medical office building in the highly-coveted Rittenhouse Square submarket of Philadelphia, Pennsylvania, on behalf of the seller, Chestnut Funds and Anchor Health Properties.
1740 South Street is adjacent to the Penn Medicine Rittenhouse campus, which comprises a 96-bed hospital, licensed through the Hospital of the University of Pennsylvania. Additionally, the property is positioned between the Penn Medicine University City campus and the Thomas Jefferson University campus within the Rittenhouse Square and Graduate Hospital neighborhoods, which are some of the wealthiest areas of Philadelphia with average household incomes exceeding $130,000. Renovated in 2010, 1740 South Street is 97% leased to a diverse mix of private physician groups.
The HFF investment advisory team representing the seller was led by members of HFF’s healthcare capital markets team, including managing directors Ben Appel and Evan Kovac and directors Andrew Milne and Zachary Drozda.
“Philadelphia is home to one of the nation’s largest concentrations of healthcare and higher education institutions, including the adjacent UPenn Health System, the oldest health system in the country; and 9th top-ranked in 2018,” noted Appel. “Yet, relative to other U.S. cities, health systems own more of their outpatient real estate, leaving fewer ownership opportunities for medical office investors. This creates very strong demand for quality healthcare assets in and around Philadelphia when those opportunities sporadically arise.”