One of Philadelphia's crown jewels of a building hits the market

One of Philadelphia’s most prominent addresses ­— the Wananamker building — has come up for sale and is expected to grab a price as high as $200 million or more.

The seller is a partnership involving Amerimar Enterprises Inc. of Philadelphia and what used to be known as Behringer Harvard but is referred to as Tier REIT of Dallas.

Amerimar Enterprises has had an ownership interest in the historic building since 1997 when it formed a partnership with Angelo Gordon & Co. and Cargill Financial Services to buy a majority stake in it. Under Amerimar's tutelage, more than $6 million has been invested in the property in upgrades and conversion work.

The building is at 100 Penn Square East and also fronts Market Street. It is 12 stories and totals 1.3 million square feet, making it the second-largest building in the Central Business District. Including its 660-space parking garage, the building totals 1.9 million square feet.

While the Center City’s investment market has increasingly become robust, this particular property is expected to get a lot of attention.

“Given the profile and historical nature of the building, I think it’s going to be a who’s who of local, regional, national and international bidders interested in it,” said Doug Rodio, an investment broker with JLL marketing the property for sale.

Since the Amerimar partnership got involved with the building, a series of investors have acquired the interest originally owned by Angelo Gordon. Amerimar remained in the mix, keeping its ownership stake and continuing to manage the property. Cargill bought Angelo Gordon’s interest in the property, and then in 2003, IPC US Income Commercial REIT acquired Cargill’s share of the building. In 2007, Behringer Harvard took over the portion owned by IPC. Behringer Harvard is the entity now known as Tier REIT.

When Wanamaker was constructed in 1911, it was considered an architectural and engineering achievement, and among its other accomplishments is becoming the city’s first department store. Nine of its 12 floors were originally dedicated to retail space and other uses, such as galleries, were on the lower three floors.

As the retail scene changed over the decades, so did the Wanamaker. In 1989 and 1990, floors six through 12 were converted into office space. After Amerimar bought it, the real estate company converted the fourth and fifth floors, which totaled 219,000 square feet, into office space. Macy’s continues to operate 435,475 square feet on the first three floors. The Crystal Tearoom, where events are regularly held, is on the top floor.

The building is 97 percent occupied. Macy’s is its largest tenant and its lease runs through October 2027. Its other major tenant is the Children’s Hospital of Philadelphia, which is in 252,631 square feet in a lease that lasts until June 2027.

Tier REIT recently sold two other office buildings in Philadelphia, 1650 Arch St. and United Plaza.

Source: Philadelphia Business Journal