Philadelphia office building vacancies

When Chuck Block decided nearly five years ago to go ahead with converting 2401 Walnut St. in Center City into office space, he made a commitment: The 8-story, 160,000-square-foot building would seek LEED platinum certification and would not be traditional office space.

Polished concrete floors, open floor plans and exposed ceilings were a go. To get more natural light into the space, the windows were extended down to the floor and stretched up to the ceiling.

Block, whose Bedrock Group owns the property, even devised a set of rules that tenants were required adhere to when fitting out their space. While that’s unusual for a landlord to do, it was one way Block could ensure the building met certain LEED criteria and retained its gritty industrial look.

Some of those rules:

No carpeting in high-foot traffic common areas and corridors.

Tenants were encouraged to leave the perimeter exposed and views intact — either with open common area space or glass walls allowing views from interior space.

Limited or no use of dropped ceilings — leaving original concrete ceilings and concrete columns as well as exposed duct work.

It was a bit of a risk especially since the Philadelphia office market hadn't really tested this type of space out before and the building sat on the far fringes of Center City.

Block was confident in his vision and the building's ability to capture tenants who were like-minded when it came to sustainable features and preferred open work spaces, which appeal to young professionals. He was so confident that he sometimes passed on tenants who were adamant about carpeting over the floor and installing dropped ceilings.

“It may have been better financially for the building if we had taken those tenants but I was taking a longer view instead of a shorter view,” he said.

Michael T. Dolan, a broker with Stockton Real Estate Advisors, was in charge of leasing up the building. While he understood Block’s criteria, it certainly made it more difficult to lease up the structure that many know as the former headquarters for Rosenbluth International.

Up to the challenge, Dolan sought out tenants that would appreciate the space as designed, the benefits of sustainable features as well as those willing to preserve the floor-to-ceiling views for all of the workspace — not just for executives in perimeter offices, he said.

It worked.

Once completely vacant, the building is now nearly full and a couple of leases are outstanding that will make it 100 percent occupied. Tenants that have moved into 2401 Walnut came from the Central Business District, University City and the suburbs. Rents start at $32.50 a square foot, which is comparable to Center City trophy space.

The first company to sign on was Bayada Home Health Care. When its offices were completed, it helped give prospective tenants an idea of how the space would look when fit out and also gave the building some momentum to its leasing activity. Other tenants followed.

The Delaware Valley Green Building Council, Curalate, Wharton, Poptent, Voith & Mactavish, Ammann & Whitney, and Ticketleap are among its tenants. Garces Group is relocating its headquarters to the building from Cira Centre on Monday and will open a restaurant in space fronting Walnut Street later this year.

Source: Philadelphia Business Journal