Liberty Property Trust's plan to construct a 1.2-million-sf office tower for Comcast Corp., which had committed to just 44% of the space, was so controversial that in June 2004 downtown office owners shut off the lights in their buildings in protest. The darkened sky was to symbolize the ballooning, 20%-plus vacancy rate the office sector was projected to suffer. http://www.globest.com/news/190_190/philadelphia/129968-1.html
At the June 18 topping off, the office vacancy rate in Center City was tightening to near 10.5%; Comcast had committed to more than 85% of the space and the tower is 96% pre-leased. Furthermore, the rent rate approaches $40 per sf, which is more than $12-per-sf above trophy market rate.
Citizens Bank has leased 48,000 sf as its regional headquarters. The 24,000 sf of retail space is also largely committed to, among others, the City's most notable restaurateurs, Georges Perrier and Chris Scarduzzio; a gourmet food market anchored by DeBruno Brothers, and a 2,000-sf Citizens Bank branch.
Since breaking ground in January 2005, the construction cost rose from $435 million to $495 million. In April 2006, Malvern-based Liberty sold the property to a JV in which it retains a 20% stake for $512 million.
Rising costs and increased amenities added $34 million to the projected cost of Symphony House prior to its groundbreaking in April 2005. The total tally, which includes the attached Suzanne Roberts Theatre, rose to $125 million, according to Carl Dranoff, CEO of locally based Dranoff Properties.
While numerous condo conversions were underway, Dranoff was ahead of the curve in new condo construction. Center City now faces an over-supply of residential condos, and the plug has been pulled on several planned projects.
Yet, Dranoff tells GlobeSt.com that 85% of Symphony House's 163 condo units have been sold at prices ranging from the mid-$500,000s to $4 million. The building, located just south of Kimmel Center for the Performing Arts, creates a new luxury residential submarket on S. Broad St., while its theater reinforces and expands the stretch known as the Avenue of the Arts. It will also have a restaurant, outdoor café and grocery store.
A year and a half ago, Fort Washington-based Westrum Development Co. struck a deal to buy a 16.7-acre section of PHA's former Schuylkill Falls Housing Development for $3. The purchase was for the express purpose of creating a mixed-income community in the East Falls neighborhood.
PHA has built 135 affordable rental units and is constructing 28 affordable homes that are pre-sold. Westrum broke ground for a 128-unit townhouse complex with for-sale units at prices reaching to $800,000. "We've had great response," says John Westrum, CEO. Without disclosing costs, he has told GlobeSt.com that by last fall he had commitments for 10 of the first 12 units and anticipates a $65 million sellout.
It's a good week for Gov. Ed Rendell, who attended all three celebrations. The former Philadelphia mayor and East Falls resident is credited with initiating the transformation of S. Broad to the Avenue of the Arts and has been a vigorous supporter of the PHA/Westrum development and Comcast Center. The latter received $30 million from the state for infrastructure improvements.
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