Center City office building trades for roughly $20M

A partnership involving two Philadelphia real estate companies has bought 1760 Market St. in Center City for roughly $20 million.

The new owners plan to invest several million dollars to renovate it into office space that would appeal to those looking for collaborative space and exposed ceilings — buzz words for creative types.

Alterra Property Group and Stockton Real Estate Advisors bought the building that had been put up for sale in January and had other suitors that walked away from it. While the property was marketed as a value-add office play, the way it was designed made it lay out in a manner conducive for residential.

At one point, it was under agreement with a developer who was going to pursue converting the 15-story, 126,000-square-foot building into residential use, prompting some nervous tenants who had leases expiring in the near term to bolt from the building.

The tenant flight brought the occupancy down to 65 percent from 71.8 percent before the investor decided against buying the building.

The new owners plan to keep it as office space. The property is small compared with other Center City office buildings and, because of its size, can get overlooked.

“It’s a forgotten little jewel on Market Street,” said Jim Paterno of Stockton. “This was a classic case of overseas ownership that made the right investment but didn’t have a feel for the market.”

Paterno said he and Leo Addimando of Alterra were attracted to its location between Comcast Center and the Comcast Innovation & Technology Center, and Rittenhouse Square.

“We think a lot of vendors servicing Comcast will want to be near the company,” Paterno said, adding that 1760 Market is well positioned to capture some of that demand if it comes to fruition.

Rents are now $28.50 a square foot. “Once we start making progress with the renovations, we expect them to go up,” Paterno said.

Doug Rodio and Jim Galbally of JLL represented the buyer and seller, AFIAA, an investment adviser for pension funds in Switzerland that bought the building in 2006 for roughly $22.6 million. Chad Ocutt of JLL arranged the financing.

Source: Philadelphia Business Journal