Penn Mutual Towers to get new name and expansive renovation

The new owner of Penn Mutual Towers is changing the name of the office building to One Washington Square.

Rubenstein Partners, a Philadelphia real estate investment firm, decided the 850,000-square-foot structure needed a new identity and one that would better match its location. The three-building complex overlooks Independence Hall and Washington Square.

The property at 510-530 Walnut St. in the Old City neighborhood of Philadelphia was named for its original anchor tenant, Penn Mutual Insurance Co. The firm is no longer a tenant and its identity tied to that tenant is a thing of the past.

“One Washington Square is a classical name that communicates where it is located and differentiates it from other properties,” said Craig Zolot, senior vice president at Rubenstein.

The building will also undergo a multi-million dollar renovation that, along with the name change, will lift a dark cloud that has hovered over the building for the last few years, said Jack Soloff, an office broker with Newmark Grubb Knight Frank, which is overseeing leasing at the property. For one thing, the past owner couldn’t fund routine maintenance and necessary improvements.

“It’s been capital starved for many years,” Soloff said.

The building as Penn Mutual Towers has had one rough ride. In the fall of 2007, it was put into receivership when its then owner decided to relinquish the property to the lender. An undisclosed New York investor bought the building in 2006 — the peak of the market — for $126 million.

It was weighed down with debt.

Debt on the building at the time totaled more than $100 million and the owner didn’t have ample capital to make needed upgrades and maintenance to the building. On top of that, it saw several large tenants depart, which, at one point, drove its vacancy to reach more than 20 percent.

Earlier this year, Rubenstein bought the note on the property. The purchase meant Rubenstein was returning to owning commercial real estate in the Philadelphia market after a decade-long hiatus. At one point, Rubenstein had been one of the largest office landlords in Center City but sold its portfolio to Brandywine Realty Trust in 2004.

The first building in the complex was constructed in 1914, the second in 1930 and the third structure in 1972. Work will be done to the lobby, main reception area and first floor common areas, elevators and facade.

The refurbished lobby and common areas aim to blend the old and new parts of the complex while brightening it up. Another goal is to tie in elements that highlight the location of the building in such a historical neighborhood, said Christopher Tantillio, principal with Tantillo Architecture.

For example, a wall element will hang from an entry way corridor that will depict the city street grid from 1820 and the modern-day grid. It will be lighted. A red carpet will give a pop of color at different entrances. A new reception area will be more inviting and brighter. An enclosed mezzanine will be opened up and a slatted wood wall will be installed to soften the coldness and banality of the lobby’s existing granite walls. New furniture and other elements will be incorporated to make the lobby more of a gathering place.

The building has 187,000 square feet vacant and rents run between $26 and $28.50 a square foot.

Source: Philadelphia Business Journal