Co-working firm grabs big lease at Seven Penn Center

A Washington, D.C., co-working company has secured a 56,776-square-foot lease at Seven Penn Center and, once open, will become the largest co-working space in Center City to date, according to multiple sources familiar with the deal.

MakeOffices, which changed its name from UberOffices last month to quell the confusion brought on by the car sharing service, signed a lease on four floors at 1635 Market St. and will move in sometime in the third quarter of 2016. Kevin Maloney, Mark Adzick, George Cauffman and Joe Wolff of CBRE Inc. represented the landlord while Avison Young from Washington D.C. represented the tenant. An official from MakeOffices couldn’t be reached for comment.

Seven Penn Center, which is being rebranded as 1635 Market, has seen a flurry of leasing… more

WeWork signed earlier this year to occupy 30,000 square feet at the Piazza in Northern Liberties and has grabbed another roughly 18,000 square feet in space above the Cheesecake Factory at 15th and Walnut streets.

Up to this point, the Northern Liberties location had been the largest co-working space in the city.

Co-working spaces, while they don't occupy a significant amount of the overall office market, continue to grow in the city and suburbs.

In Philadelphia, there are approximately 30 co-working spaces totaling more than 270,000 square feet and that number was expected to climb to nearly 400,000 square feet. It's a part of the office market that is under going growing pains as some co-working operators have abruptly closed, while others seem to create a real sense of community and meet the needs of its users are thriving.

MakeOffices has also reportedly signed a deal to lease about 24,000 square feet at Commerce Square that is set to open sometime early next year.

Its deal at Seven Penn is a big one for the office building. When Nightengale Properties of New York bought the 19-story, 286,574-square-foot property a year ago, it was 44 percent vacant. The firm paid just $39 million for the property, which was in need of a makeover inside and out.

The new owner's goal was to invest $5 million making a series of upgrades to the building’s façade, main lobby, elevators and other areas in attempt to make it more attractive to tenants and lease up the vacant space. So far, that strategy appears to be working.

In addition to MakeOffices, Primrose School, a day care center, leased 2,542 square feet of retail space that had been occupied by Bassett’s Original Turkey and another 13,269 square feet on the second floor. The center will have its own private entrance and separate elevator. Earlier in the year, Sellers Dorsey, a consulting firm, took 5,200 square feet.

The leasing activity has meant that the building is now 85 percent occupied.

MakeOffices has been expanding into new cities. The growth has been propelled by $14 million in funding it raised last year. One of those rounds was led by MRP Realty, a Washington D.C. real estate firm that recently bought the Kaiserman portfolio in Old City. It is one of the Washington D.C.’s biggest co-working players but is creating a national footprint.

Source: Philadelphia Business Journal