U. buys dozens of area apt. buildings

Penn purchased Campus Associates' 36 area properties. In one of the University's biggest real estate deals of the last few years, Penn recently bought area landlord Campus Associates, which owned and operated 200 rental units in 36 area buildings. The move is part of the University's ongoing effort to expand its involvement in the area surrounding campus. Officials from the University and Campus Associates refused to disclose the exact locations of the properties or the financial terms of the deal, which was completed on July 1. Neither institution had announced the acquisition. No definite plans have been made about the immediate future of the properties, all of which are in the vicinity of 39th and Pine streets and are currently occupied, according to Tom Lussenhop, Penn's top real estate official. But Lussenhop said the purchases were a part of the University's long-term plans to secure more housing opportunities for faculty and staff members and to reduce the density of undergraduates in area housing. Last spring, University officials announced an initiative to buy run-down homes, rehabilitate them and then sell them as single homes. Penn also unveiled two programs that provide cash incentives for faculty and staff members to buy homes and remain in University City. "It's too early to tell exactly what we'll do with the properties, but we're obviously involved in a major neighborhood transformation," Lussenhop said. The properties and the management functions of Campus Associates are now under the control of Penn's for-profit real estate arm University City Associates, which is operated by Trammell Crow Co. Lussenhop said the University is "looking to acquire a significant stock of housing in the near-in neighborhoods" and that "this purchase offered us a chance to consolidate and improve off-campus housing options." "We are going to try to determine where opportunities for single-family homes and housing for graduate students exist as well as look at streetscape and block improvements," Lussenhop said. A variety of factors attracted University officials to the properties, according to Lussenhop. Because the deal involved so many properties, the University will be able to make large-scale improvements with a single investment. Also, properties in the area east of 43rd Street rarely become available for purchase, largely because landlords are often reluctant to sell properties for which they can charge high monthly rents. Penn officials approached Campus Associates in November 1997 about acquiring the company and they closed the deal eight months later, according to former Campus Associates Managing Director Ric Cohen. "This is a deal that made a lot of sense for all the parties involved," said Cohen, an attorney who consults on real estate and entertainment issues. The purchase is the latest of Penn's area real estate buys. In the fall of 1996, Penn bought the Sheraton University City hotel for $12 million and paid $1.95 million for 16 properties with 115 residential units located north of campus. Two years earlier, the University bought the former Christian Science church at 4012 Walnut Street for $850,000 and renamed it the Rotunda.

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