Post Brothers to start building conversion: Condos or apartments for 260 S. Broad St.?

As Post Brothers puts the finishing touches on its Gold-Tex apartment project, the developer is gearing up to move forward with the conversion of 260 S. Broad St. in Center City.

The company is still finalizing its budget and started some preliminary work on the building including constructing a model unit. Nearly all of its office tenants have vacated the building except for Public Health Management Corp., which is scheduled to move out next March or April. Ruth’s Chris, an existing retail tenant, will remains and a successful New York-based Latin food concept is being eyed for the other restaurant space.

The developer is also still figuring out exactly what it wants to do with the building. It’s definitely going residential but whether it goes condo or rental is still being debated.

“We could build anywhere from 50 units in the case of condos to nearly 300 if we decided to max out the density for residential rentals,” said Matt Pestronk, one of the co-founders of Post Brothers.

The condo market is starting to show some signs of life as interest rates remain low and many of the units that slogged through the recession are finally being absorbed.

The one project that still has a little more than half of its units sold is the Residences at the Ritz-Carlton. The 48-story tower has 270 condos of which 141 have sold. (It’s new front yard will be the redeveloped Dilworth Plaza, which might help attract some buyers.) It’s a big project but by comparison the Murano had 302 condos, 10 Rittenhouse Square 161 condos and 1706 Rittenhouse Square had 31 condos.

Whether the condo market is staging a comeback is debatable.

“Clearly there has been a ton of rental built because developers have the opportunity to finance them,” said Allan Domb, Center City’s so-called Condo King. “There has almost been too many rental built but by the same token, I think the next two to three years, you will see some prime rentals convert to condo.”

The condo market peaked in the summer of 2005, and since then, very little inventory has been added and there is still demand, he said.

Even before Post Brothers has gone full bore on converting 260 S. Broad, the firm is already received “a large amount of unsolicited interest” from investors looking to buy the building, Pestronk said.

“In real estate, everything is for sale, all of the time,” he said. “The property is a unique trophy building in an A-plus location and offers a blank slate for re-purposing. We are by all means proceeding with developing the property as condominium or rental apartments, in the normal course of business.”

Source: Philadelphia Business Journal