1835 Market St. hits the market, could trade for more than $100M

In 2002, a joint venture involving the California State Teachers Retirement System bought 1835 Market St. in Center City for $80 million. Now CalSTRS has put the office tower on the market and is hopeful a buyer comes along to pay $100 million for the building.

“We think it will be around $100 million if not a little more,” said Doug Rodio, an investment broker with JLL who has been retained to market the building.

The 29-story property has 660,343 square feet of office space, 26,160 square feet of retail and a three-story, underground parking garage with 176 spaces. The building, which was once known as 11 Penn Center, was constructed in 1986. Klehr Harrison is one of its anchor tenants. Its office space is just 75 percent occupied and 159,182 square feet is vacant.

Rodio believes the property presents a value-add opportunity for a new buyer. Aside from filling the vacancy, some of the building’s common areas, such as the lobby, could use some sprucing up, he said. And, then there’s the plaza.

“We think the way that is situated on Market Street creates an opportunity to create some additional square footage,” Rodio said, noting some other office properties along Market Street have constructed what amounts to small glass boxes to add retail space.

Some preliminary conversations with architects indicate that an additional 15,000 to 20,000 square feet could be developed, he said.

“With retail rents and retailers interested along Market Street, that could really move the needle with cash flow,” Rodio said.

Some other downtown office buildings on the market include 1818 Market St., Seven Penn Center, which is under contract, 3535 Market St. and 401 Market St.

Source: Philadelphia Business Journal