Thursday, April 10, 2014

Marketplace Design Center sells for $42M



A partnership consisting of PMC Property Group and Lubert-Adler has paid $42 million to buy 2400 Market St., otherwise known as the Marketplace Design Center, in Philadelphia.

The new owners have big ideas to convert the property, which consists of two buildings — 2400 Market St., which is about 370,000 square feet, and 12 S. 23rd St., a six-story, 120,000-square-foot structure. Their plans are preliminary and have not gone through the city’s approval process so they could change. However, for now the plans consist of multiple components that could cost more than $100 million to complete.

The property has appeal on many different levels and offers the new owners a chance to create something that they believe could be extraordinary.

“It will be the most exciting project Lubert-Adler has worked on in 15 years,” said Dean Adler of Lubert-Adler. “I think it’s going to be our crowning project.”

Adler views the complex from his offices at Cira Centre and has studied its potential to be transformed into a mixed-use development. One of its strengths is its location.

“This is really the gateway to Philadelphia,” said Adler, citing the property’s position across from University City, 30th Street Station, near Rittenhouse Square, the Central Business District as well as near Interstate 76 and the Schuylkill Expressway. “This is one of the most ideal locations for any type of use. It is in the heart of two places that are exploding and you’re at the epicenter of town.”

The design of the property and how it was built also lends itself to more opportunity. One of the key advantages to 2400 Market is the enormous size of its floor plates. The structure has 70,000-square-foot floor plates compared with the roughly 20,000-square-foot or so floor plates commonly found in office buildings that are converted. The size gives the developer ample room to work with as well as gives the property expansive frontage along the Schuylkill River and long window lines.

In addition, the complex was constructed for industrial use, which means its can withstand heavy floor loads and a substantial addition on its roof. Early plans include constructing a structure on top of the building that would be used for residential units. How tall that extension would be and how many apartments it would hold hasn't been determined.

“You’re not going to build some massive high-rise,” Adler said.

The large floor plates — nearly two acres in size — also means the roof of a newly constructed extension could be turned into an outdoor oasis.

By starting the residential portion from the existing rooftop and going up from there for the multifamily portion of the development has other implications: Residents would have unobstructed views.

Part of the vision at 2400 Market includes keeping the lower floors as the Marketplace Design Center. However, upgrades would be made to the first floor and new retail space created to make room for a grocery store, restaurant and coffee shop. Another component of the redevelopment would be to incorporate office space into the building that would appeal to the creative class.

Adler is excited about the redevelopment's potential and still working out some of the details involved in undertaking such a project.

“It’s an amazing building and the most exciting redevelopment opportunity in Philadelphia,” Adler said. “What is the building of the future? The building of the future is to create a live, work and play environment. That’s what we’re doing here.”

Loeb Partners was the seller of the building. James Galbally, Doug Rodio, Jim Vesey and John Plower of Jones Lang LaSalle arranged the sale.

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