"We specifically set the lease under a 20-year limit, which allows the Commonwealth to avoid city legislation. It was beneficial for both parties," Shawn Southard, the director of PREIT corporate communications, tells GlobeSt.com. "The Commonwealth was located on North Broad and announced sale of their old building. I don't know why the decision was made, why they sold the building or why they moved."
The space will hold 12 state agencies and more than 750 employees and will serve as the new Philadelphia regional office for the Commonwealth of Pennsylvania. The aggregate lease value and price per sf were not disclosed to GlobeSt.com by PREIT.
The Commonwealth is taking floors 4, 5 and 6, or 224,000 sf of office space. The Commonwealth plans to move into the building in the summer of 2009. The sub-basement and first three floors are vacant and will be renovated retail space.
PREIT controls everything from the sub-basement to the sixth floor, and acquired the space from Macy's in July 2006. The Gallery, also owned by PREIT, connects to the retail portion of 801 Market St., which are floors one through three. Floors seven through 13 of 801 Market St. are controlled by another company, Gramercy, and are purely office space.
"801 Market is dead center in the city. It's a historical district and it's been heavily department store retailed. In the early 1900s, the city decided they needed to rejuvenate the area," says Southard. "In addition to the main retail street, the regional railways run underneath this area of the city and the railways all feed under this neighborhood."
The Strawbridge & Clothier department store made its home in the historic building at 801 Market since 1868. The original building was torn down and replaced by the West Building that was constructed in 1902 and then the East Building in 1928.
"These were built at the time to house Strawbridge & Clothier, up to the day they closed their doors in the May 2006, the department store took the entire West Building and six floors in the East Building, which is 13 stories tall."
PREIT is shooting for a LEED Silver rating with the renovations, but the historical aspects of the building will be preserved, according to Southard.
"There's a considerable amount of work that should be done to modernize the building for office. We're renovating with two things in mind. We want to retain all the historical significance of the external façade, crown moldings, and door and window frames," says Southard. "Also, PREIT has taken to the sustainability movement and when we looked at the renovations we saw that some of the materials can be recycled and reused."
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