Independence Blue Cross Acquires Philadelphia Headquarters for $360M
PHILADELPHIA — Independence Blue Cross has acquired 1901 Market Street, a Class A office tower in Center City Philadelphia, for $360 million. The 45-story, 800,000-square-foot building has served as the health insurance company’s headquarters since construction was completed in 1989. Atlanta-based Piedmont Office Realty Trust (NYSE: PDM) was the seller.
The property has received more than $110 million in capital improvements over the last eight years. Upgrades included a new lobby, outdoor plaza and mechanical systems, as well as renovations throughout the interiors for a more modern look.
The building is the eighth-tallest office tower in Philadelphia and houses nearly 2,500 Independence associates. Independence is the sole occupant of the building.
In addition to 1901 Market Street, Independence’s campus includes a customer service call center and Independence LIVE, a customer experience center. Both connect to the company’s headquarters via a courtyard that is open to the public.
Prior to the purchase, Independence was in a long-term lease. But the company found the purchase attractive because low interest rates enabled Independence to lower its annual cost of occupancy, according to Donna Farrell, vice president of corporate communications.
Robert Fahey, Jerry Kranzel, Erin Hannan and Jack Corcoran of CBRE Capital Markets marketed the property on behalf of Piedmont, which is a real estate investment trust focused on the acquisition, development, ownership and management of Class A office properties in Atlanta, Boston, Dallas, Minneapolis, metro New York, Orlando and Washington, D.C. Its stock price closed at $16.60 per share on Tuesday, June 30, down from $19.93 one year ago.
Independence is the largest health insurer in the Philadelphia area, serving more than 2 million in the region and 7 million nationwide. It is an independent licensee of the Blue Cross and Blue Shield Association.
— Kristin Hiller