Columbia Property Trust announced in December 2019 that it had sold the Cranberry Woods campus occupied by Westinghouse Electric Co.

CRANBERRY TWP — The year began with a real whodunit — but detectives had nothing to do with it.

Columbia Property Trust announced in December 2019 that it had sold the Cranberry Woods campus occupied by Westinghouse Electric Co. At the time, it seemed like a normal property sale — albeit one that pulled in a jaw-dropping $180 million.

Identity shrouded

It quickly became apparent, however, that this was no ordinary sale. Rather than selling the Westinghouse campus, Columbia had transferred the deed to a newly created subsidiary, which was evidently owned by a series of other, also newly-created subsidiaries.

CF Cranberry LLC was the owner of the property, according to deed records. The company that owns the property is, in turn, owned by CF Cranberry Properties LLC. Another subsidiary, CF Cranberry Holdings I LLC, holds an 11% interest in that holding company, while CF Cranberry Holdings II LLC holds an 11% interest in the first Cranberry holdings company.

One more subsidiary — CF Cranberry Buyer LLC — was created in Delaware during the week the other subsidiaries were registered. A letter sent by Columbia to Cranberry Township and Seneca Valley School District identified CF Reactor LLC as the property's new owner.

The company then would not provide any comment about who is the new owner of the 823,000-square-foot property. Neither did Jones Lang LaSalle, the real estate firm that brokered the sale and is involved in the search for new tenants.

Even after the Eagle determined via property records that the new property owner was Fortress Investment Group, a New York equity firm, Columbia remained mum, as did JLL and Fortress.

Tax controversy

Even though the property sold for $180 million, deed transfer tax was only paid on $145.4 million. That difference resulted in about $200,000 less revenue to both the school district and township — and they wanted to know why.

Township manager Jerry Andree and district superintendent Tracy Vitale sent a letter to Columbia asking why they didn't receive that extra $200,000. The answer didn't please Andree: It was legal because the sale was so convoluted.

While Pennsylvania had closed a large number of loopholes surrounding deed transfer tax over the past decade, the use of at least five holding companies that didn't have a 100% ownership stake in each other kept them from paying tax on the sale price. In fact, the only reason tax was paid at all was because the property was transferred to one subsidiary to facilitate the sale.

The Westinghouse sale is likely the first of many high-value deals to pass through a handful of subsidiaries. In Center Township, for example, the site on which the Abie Abraham VA Health Care Center sits was sold to a company specializing in procuring visas for foreign investors, and the sale was done in a similar way.