Wells to Buy Blue Cross HQ in Philadelphia for $200 Million

Philadelphia Business Journal - December 19, 2003

Wells Real Estate Funds will buy Independence Blue Cross' headquarters building at 1901 Market St. for an estimated $200 million. Wells Real Estate Funds, a firm that focuses on buying premier office and industrial properties, bought the 840,000-square-foot building for roughly $250 a square foot from the real estate affiliate of Prudential Financial. The purchase is the first in the Philadelphia market for the Georgia firm.

Independence Blue Cross constructed the 50-story blue-glass tower in the late 1980s for $190 million. The structure was constructed during a Philadelphia building boom in the late 1980s and early '90s that was sparked by the signature One Liberty Place.
The IBC building allowed the insurer to consolidate its workers into one site. At the time, the company had about 1,500 employees spread between Centre Square and the Weidner Building.

The building was developed by Linpro Co., a Berwyn real estate company that no longer exists. Linpro and IBC were initially partners in the project, but the insurer bought out the real estate company's interest in 1987. The building is adjacent to 1919 Market, a vacant lot on which Linpro had originally intended to construct another tower that would complement the IBC skyscraper. The 33,746-square-foot plot, which remains vacant, is now owned by UJF Bank of Tokyo and is on the market.

IBC sold the building in the mid-1990s to Prudential for an undisclosed amount. It's believed by local real estate sources that the sale price at the time was around $150 million. The insurer will decline comment until the sale between Prudential and Wells has been finalized.

Wells Real Estate buys properties that are leased long-term -- seven to 12 years -- to preferably a single tenant that is of Fortune 500 caliber. It typically buys in major and secondary U.S. cities. The firm also deals in cash, closing transactions within 45 days. The IBC tower fits Wells' investment agenda. IBC has a lease on the property for more than 10 years at rents that are estimated to be in the mid-$30s per square foot. The acquisition is likely to be completed by the end of the year.

The building, which is reminiscent of the nondescript glass office towers commonly found in Houston, received some notoriety in 1997 when Alain "Spiderman" Robert, a French daredevil who became famous for scaling tall buildings, climbed 44 stories of the high-rise before he was dragged in by police waiting on a balcony. In true Philadelphia spirit, Robert had a "Go Eagles, Beat Dallas" banner while he climbed the building. Before attempting the IBC building, Spiderman had scaled the Empire State Building as well as Kuala Lumpur City Centre in Malaysia.

Officials from Wells and Prudential couldn't be reached for comment.

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