The 18-story, 470,000-sf, multi-tiered Beaux Arts structure now houses the Philadelphia Daily News and Philly.com in addition to the Inquirer. It is located on 4.2 acres at 400 N. Broad St., and the asset includes a parking area at 15th and Callowhill streets.
PMH, a private investment group headed by Brian Tierney, a former area ad executive, and Bruce Toll, a co-founder of Horsham-based Toll Brothers Inc., acquired the newspapers and associated assets, including the real estate, in May 2006 for $515 million. At that time, Tierney envisioned monetizing the real estate, William Luff, managing director and EVP of JLL, tells GlobeSt.com. An offering memorandum will be distributed nationwide after Labor Day, he says.
There is no asking price. According to published reports, it is assessed at $16.7 million. On condition of anonymity, principals of two local brokerage firms tell GlobeSt.com that it will sell well above that, although the ultimate price could vary significantly, depending on a buyer's intended use. One suggests a broad range of between $25 million and $40 million, adding, "that's a guesstimate. These are uncertain times, and this doesn't fit a traditional pricing model. With expansion of the convention center, I would think a hotel developer would be the best bet," he speculates. The other declined to suggest a price.
Luff says the property is being marketed under "a multiple of scenarios," and he outlines three. The newspaper company is now using between 250,000 sf and 300,000 sf in the building. "Under one scenario, a developer or investor might want to lease that portion of the space back to the newspaper," he says.
"A buyer might want to utilize space where the parking lot is to build a new building for the Inquirer and redevelop the existing one for a different use," he adds, "or someone might want to redevelop the entire asset." JLL has also been retained to negotiate space for the ongoing PMH staff and operations, including any required relocation.
While wanting to monetize the real estate asset, Luff says the current owners "enjoy the tradition of this site, but have many goals. They also want to provide state-of-the-art newsroom facilities and layouts for the employees." JLL has retained the Washington, DC-based architectural firm of Lehman, Smith, McLeish to help in programming such future facilities for PMH employees. In addition, H2L2, a locally based architectural firm, has been hired to develop ideas for various potential uses of the building and site.
"We're marketing it to broad sectors," Luff says, "including office, hotel, multifamily and retail prospects. The area north of Broad is rapidly revitalizing, and we think this offers a range of different positive opportunities."
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