Kaiserman portfolio closes, renovations in the works

MRP Realty has closed on the Kaiserman Co. portfolio in Old City.

In a transaction reportedly valued at an estimated $110 million, the Washington, D.C., real estate company is now in control of three office buildings and a garage with a movie theater. Each property has some retail space. Kaiserman put the portfolio up for sale last spring.

The properties total 702,014 square feet and include 400 Market St., 325 Chestnut St., 111 South Independence Mall East — also known as the Bourse building — and 400 Ranstead St. The Kaiserman family owned the portfolio for more than three decades.

The acquisition means that a significant portion of Old City's office properties have changed hands in the last couple years.

Among the new owners are: Rubenstein Partners at One Washington Square, which had been known as Penn Mutual Towers; Keystone Property Group, which bought the Dow building and Curtis; Miller Investment Management, which bought 401 Market St.; and Carlyle Development Group, which now owns Public Ledger.

The attention to the historic area, which had been neglected by tenants and investors for years, has picked up as the entire East Market area of Philadelphia has gained momentum. A number of factors is driving the uptick in interest.

The redevelopment of the Gallery, the construction of the East Market development on the former Girard Square site and the nearby burgeoning waterfront, as well as Brickstone Realty Co. reinvigorating properties that hadn’t changed hands in generations into residential and creative office space, have conspired to shift investor attention to this part of Philadelphia.

It’s not at the expense of other areas of the city but rather a renewed appeal for a corner of Philadelphia that hasn’t been seen in decades.

So far, the new ownership has infused their buildings with cash and ideas, bringing up to modern times properties that, in some cases, had become stale, dull and unkempt.

Based on MRP's preliminary plans, that will continue with the Kaiserman portfolio.

The company plans a series of upgrades to the properties, which are Class B at best and teeter on Class C in some respects.

The company said that:

325 Walnut, which was constructed in 1960, will see facade renovations along with new common areas and new amenity space;

• Bourse’s ground floor retail space will be repositioned and the facade and common areas renovated;
• 400 Market will have its dingy bathrooms and common areas renovated; and
• The garage at the Bourse will see its common areas upgraded and retail space renovated along with re-leasing the theater space.

Source: Philadelphia Business Journal