401 N. Broad St. moving forward with $70 million renovation

The new owner of 401 N. Broad St. in Center City is moving forward with a $70 million renovation to the telecom building.

At the same time, Cushman & Wakefield has been retained to lease up a large vacancy in the building.

Amerimar Enterprises and its two partners in the property are hopeful the multi-phased, multi-faceted improvements planned for the building will help entice new tenants to lease space at 401 N. Broad and fill up its empty space.

The building is considered one of the most important mission critical data centers along the East Coast. Amerimar and its partners bought the property in March.

About 300,000 square feet of the 11-story, 1.3-million-square-foot building is empty. The vacancy came about when some of its non-data related tenants vacated. For example, a publishing company once used a portion of the space and the city once stored some records in part of the building.

The renovations aim to position the building “to truly realize its full potential,” said Roger McManimon, a broker with Cushman & Wakefield. “They want to take a look nationally and see what the best practices are and implement them at 401 N. Broad.”

McManimon along with colleagues Jack Meyers and Jason Bernardi have been retained by Amerimar to lease up the space. Aside from leasing traditional office buildings, the trio is part of Cushman & Wakefield data advisory group.

The first phase of work will entail overhauling many of the building’s mechanical systems and its security and creating new shaftways from decommissioned elevators. The shaftways are used to house cabling. Work will also be done to the façade.

In addition, a 20,000-square-foot “meet-me” room will be constructed. This is space within a telecom hotel where different networks can connect with each other. It will be carrier neutral and owned by Amerimar.

Work will also entail preparing the vacant space with the necessary equipment and other gear that telecom tenants need.

The types of tenants that might be interested this data center space is vast.

“The industry is growing exponentially,” McManimon said.

For example, Sungard is currently a tenant in the building and is one example of a type of company that would lease space in 401 N. Broad.

Tenants can come from a range of industries including financial, cloud and information technology services, manufacturing, health care, universities and other institutions. Aside from housing Internet data and data communications, data centers are used for disaster recovery purposes, processing transactions and even housing corporate IT operations.

Leases are typically a minimum of 10 years and most often 15 years. Rents on the space at 401 N. Broad run in the $30s a square foot and much of that expense is the power that these tenants use.

The building does have some downtown competition including 833 Chestnut St., 4775 League Island Blvd., 2401 Locust St. as well as a portion of 1500 Spring Garden St.

Source: Philadelphia Business Journal