(For more retail coverage, click GlobeSt.com/RETAIL, and for more on the multifamily market, click here.)
PHILADELPHIA-A partnership between locally based World Acquisition Partners and Patriot Parking Corp. has closed on the acquisition of an 8.5-acre L-shape parcel along JFK Boulevard between 20th Street and the Schuylkill River. The JV has unveiled plans for Philadelphia River City, a mixed-use complex that would encompass 12 million sf of residential, office and retail at an estimated cost of $3.6 billion.
Ravi Chawla, World Acquisition's president, declined to disclose the price for the land being sold by a New York City investment firm, but tells GlobeSt.com, "It was appraised by Cushman & Wakefield at $77 million." The land is largely occupied by surface parking lots. "We are in the very, very early stages of the Philadelphia River City plan. We began with what could be done on the largest of scale and will refine it in consultation with the neighborhood, government and in accordance with market demand. Similar to Peachtree Center in Atlanta, it is a generational project that will take up to 20 years."
The concept, developed by locally based Daroff Design Inc., calls for an aggregate of 3,700 residential units; two hotels; between three and four million sf of office; two million sf of retail, restaurant and entertainment, and parking for approximately 3,000 vehicles. The tract includes air rights over the Septa regional rail line. "The office piece will include a media center with television and sound studios," Chawla says. "There will also be a people mover for pedestrian travel between 30th Street Station and 20th Street."
The residential component will be a mix of market-rate rental and for-sale condos, "depending on what the market demands," he says. "With so many condos coming to market, it's difficult to tell, this far out, what demand will be." The construction cost estimate, he says, is based on 12 million sf at $300 per sf, "but, over time, it could go higher."
Building height is an issue yet to be resolved. Legislation has been proposed to limit height on some portions of the site and neighbors have signaled resistance to the initial concept that contains 10 towers, some of which reach to 60 stories. "People are sensitive to height, but not to width, when, in actuality, wide, low buildings block more light than tall ones with space between them," Chawla says. "Philadelphia is a first-class city that deserves something of impact. We're not fixed on a certain number of stories, and we could create monolithic, full-block lower buildings, which would sacrifice light and aesthetics."
He estimates that further planning will take two years, and construction will begin with infrastructure work. "It's a complicated site, because of the railroad tracks." Completion of the complex, he adds, "will involve a series of JV partners with expertise in different areas of development. We've had conversations with retail, office and hotel developers, and have interest but no commitments."
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