230 S. Broad St. in Center City hits market

An office building along Philadelphia's Avenue of the Arts that was designed by Horace Trumbauer has come on the market.

Flanked by the Bellevue and Academy of Music, 230 S. Broad St. is a 22-story, 216,000-square-foot building that was constructed in 1925. It is owned by a partnership involving SSH Real Estate, which bought the structure in June 2005 for $21 million.

A rough estimate of how much it could trade for today pegs a price at about $150 a square foot, or more than $32 million. However, that calculation changes if a prospective buyer eyes the building as a potential residential conversion. It has been considered a good target for a condo or apartment use in the past because of its location, floorplates and layout.

"As the office market in the [Central Business District] continues to improve we have seen the price differential shrink between what a converter is willing to pay for a building and what an office owner is willing to pay for the same building," said Doug Rodio, an investment broker with JLL. "I'd argue that this speaks more to the strength of the office market today rather than a softening of the conversion market."

Its future value may be to keep it as is. The building is nearly full with office tenants who signed long-term leases. Occupancy now stands at 91 percent, said Dan Mayock, a broker with SSH Real Estate who is marketing the property for sale. When new tenant, Industrius, moves in, the building will be about 94 percent occupied, he said. Industrius, a firm that sets up co-working space, leased two full floors, or about 21,000 square feet,

Other tenants in the building include Estia, a restaurant, and AJO Partners, an investment adviser that has $25 billion under management. Rents go for about $23 a square foot though some leases were done during the recession and are below that, Mayock said.

The owners have decided to sell now, having determined that after 10 years, it's time to reap any gains made on the investment, said Mayock, who declined to estimate how much it might sell for.

"The market will tell us what it's worth," he said.

The building's architect, Trumbauer was a popular, diverse architect who was involved in several landmarks throughout the city, including the Philadelphia Museum of Art and the Free Library of Philadelphia.

Source: Philadelphia Business Journal