$125M buyer plans apartments in empty Curtis offices

Keystone Property Group, Bala Cynwyd, and North Jersey-based Mack-Cali Realty Corp. say they have jointly purchased Curtis Center, an underused Independence Mall office building with a soaring stone atrium and a Maxfield Parrish stained-glass window in the lobby, for $125 million in cash and will replace some office suites with "luxury apartments."

Mack-Cali has sold dozens of aging Philadelphia-area office buildings to Keystone over the past year but has said it wants to stay in the area as an apartment developer. Keystone boss William Glazer says he hopes to add younger office tenants by converting surplus space to restaurants, apartments and other features he calls "lifestyle-oriented" or "live-work-play", alongside office updates. Tenants include the U.S. General Services Administration. Glazer and his partners plan an initial 90 apartments averaging 1,000 sq. ft. each, and maybe more as office leases expire.

The complex and the neighboring Public Ledger Building were updated in the 1980s but have seldom attracted full occupancy or above-market rents in recent years. Citibank bought the two buildings for $137 million in 2006; they were later acquired as part of a large portfolio of Citi real estate by Sixers owner Josh Harris'  Apollo Global Real Estate, which put them up for sale three years ago.

Curtis Center lies "in the heart of the growing Philadelphia housing market," said Mitchell E. Hersh, president and CEO of Mack-Cali, whose founders include Earle Mack, former name donor of Drexel University's law school, in a statement.

Besides apartments, the partners plan to add restaurants with outdoor seating along Washington Square and Independence National Historic Park, upgraded elevators, heating, air conditioning, parking and roofing. A Keystone affiliate will run the restaurants and stores; Mack-Cali's Roseland unit will develop and lease the apartments.  

In the early 1900s, the building was the sumptuous home of Cyrus Curtis' publishing empire, which included the Saturday Evening Post, the largest-circulation U.S. magazine in the early 1900s, as well as the Inquirer and many other publications, filling 85,000 sq. ft. and a whole city block and attracting related businesses like the pioneering N.W. Ayer ad agency across Independence Square. (The Curtis empire also included the company's Curtis Park, Delaware County, printing complex, a fleet of electric vehicles, even a paper mill in Newark, Del.)

Source: Philly.com