Dranoff to market, sell Residences at Two Liberty Place

Hoping for a repeat of the experience at 10 Rittenhouse Square, iStar Financial has handed the remaining 73 condominiums at the Residences at Two Liberty Place to developer Carl Dranoff to market and sell.

Sales of those units, on the 42d through 57th floors of the Center City skyscraper, were to have begun Wednesday after a brokers' open house that drew more than 150 area agents, but the first contract was signed Tuesday.

The number of brokers at the open house attested to the market's high demand for luxury condos and the dearth of supply.

Doug Pearson, owner and chairman of Kurfiss Sotheby's International Realty, in New Hope, said Two Liberty should "do very well, especially because they're doing it at the right time, with such a shortage of inventory."

Mickey Pascarella of Keller Williams Realty, in Center City, extolled the views, "right down to Bill Penn's hat on City Hall."

"There's nothing new until [Dranoff's] 1 Riverside comes on line," Pascarella said.

The 58-story, 1.2 million-square-foot Two Liberty Place at 50 S. 16th St. was completed in 1990 as a primarily commercial building. The Residences at Two Liberty were carved from the upper floors in 2005 by American Capital Partners and the Falcone Group.

In 2012, iStar took title to the unsold units and raw space, and once considered turning those floors into a boutique hotel, industry sources said.

The median price for the remaining Two Liberty condos should be in the $750-per-square-foot range, Dranoff said.

Istar will fund refurbishment of the Residences at Two Liberty lobby and creation of an amenities floor on the 37th level.

Dranoff cracked the standing $1,000-per-square-foot price ceiling in 2013 at 10 Rittenhouse, which iStar had given him to market and sell in late 2011, after the lender had taken control of that building and nearly 100 unsold units from the developer and another lender.

One unit in the 10 Rittenhouse tower remains for sale, said Dranoff Properties' marketing director, Marianne Harris, but "there is a list of people interested."

High-end condos are hot, said Kevin Gillen, chief economist at Meyers Research and senior research fellow at Drexel University's Lindy Institute for Urban Innovation.

In 2014, 104 million-dollar-plus condo sales were recorded in Center City, Gillen said, based on data from the city Recorder of Deeds Office. Dranoff called that a "stunning statistic" that likely had not been seen since 2006, before the housing bubble burst in August 2007.

Growing demand for new condos prompted Dranoff in September to change his 1 Riverside project at 25th and Locust Streets into for-sale properties from apartments, "just as the market was peaking," Gillen said. A sales office will open this spring, Dranoff said.

His 47-story joint-venture luxury boutique hotel-condo tower at Broad and Spruce Streets, announced in December 2013, will start with demolition of the two buildings on the site, he said. Construction will start there in the next 12 months.

Developer Tom Scannapieco is due to break ground in the spring on 500 Walnut, a 38-unit luxury high-rise at Fifth and Walnut Streets. The building will be ready for occupancy in 2017; half the units have been reserved by buyers.

At the Residences at Two Liberty Place, condos - one-bedroom to penthouses - will range in price from $750,000 to more than $2 million, Harris said.

As at 10 Rittenhouse, prices of the Two Liberty units will not be cut just to sell them quickly.

"There is no deadline," Dranoff emphasized.

Gillen said the high-end Philadelphia condo market "appears to be tracking the overall high-end Philly housing market pretty well, with million-dollar sales consistently running above their historic average ever since the housing market began to recover three years ago."

"Indeed," he said, "until very recently, our housing recovery has been disproportionately driven by a recovery in the upper end of the housing spectrum, with the lower end remaining stuck in neutral."

That changed in the city last year, Gillen noted, as more lower-income buyers and less-expensive neighborhoods began taking off.

With so much on his plate these days, Dranoff was asked why he took on Two Liberty.

"They are spaced out well," he said of the enterprises. "This fits nicely between 10 Rittenhouse and the new product."

Source: Philly.com