The site, shadowed by the Independence Place Towers I and II condominiums, is one of the most sought after parcels between Walnut and Spruce streets in Society Hill. Brad Nathanson, a director in Marcus & Millichap's national retail group, and Andrew Janick of its multi housing group, who are located in the Philadelphia office, represented both the buyer and the seller.
"The property was attractive to investors given the below market rent and the fact that the parcel will likely be put to better use in the future," Nathanson says. He tells GlobeSt.com that market rents are now in the low to mid-$20s per sf, which is 70% above the current tenant's rate. "The development potential," he adds, "lies with the R-13 zoning, which allows for an additional 38,000 sf to be built on the site.
"We attracted close to 10 offers, with a majority coming from out of town buyers in New York, Connecticut and New Jersey," Nathanson says. Douglas "realized the development potential of the lot in the future and understood the intrinsic value of the real estate."
Norman Jemal, VP and secretary of Douglas, tells GlobeSt.com, "we love the area. We have no immediate plans for the site. The sports club will continue to occupy it for another five years, and we'll wait to see where we take it from there."
Nathanson adds, "there is a tremendous amount of interest among savvy buyers right now looking for underutilized assets sitting on great real estate in major metro markets." As evidence, he says this property traded at a 4.88% cap rate, "one of the lowest in Philadelphia in recent years."
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