Plan for $45M office building seeks business tenants as buyers

While J.B. Reilly has been the most active developer of downtown Allentown’s office rental market over the past few years, his newest $45 million project is focused on a different model.

With the plan for Tower 6, his newest Class-A building, Reilly is seeking to capitalize on what he sees as a growing interest among businesses looking to own their own office space.

“For the last five years, we’ve met with dozens of businesses that were very interested in being part of the revitalization of downtown Allentown,” Reilly said.

The Neighborhood Improvement Zone, a special tax zone introduced several years ago, fueled hundreds of millions of dollars in new construction, including a new arena in the downtown.

However, Reilly said, in his discussions with business owners, many were interested in also owning their office space.

“It’s the first time a business can own its own office space in the NIZ,” Reilly said. Businesses would also be able to sell their office space, he said.

The 12-story Tower 6 is expected to go up at the corner of Hamilton and Sixth streets and span 145,000 square feet. Construction could start in the fall, with first occupancy by late 2017, with an early 2018 opening, he said.

Reilly presented his plan for Tower 6 before the Allentown Neighborhood Improvement Zone Development Authority board Wednesday night, introducing the project to the group that reviews all proposals for projects in the NIZ.

While he declined to name any tenants, Reilly said he has about half of the building committed.

“It’s going to be a real signature, Class-A office building,” he said. “Our commitments to date, and we envision future commitments, will be professional office tenants.”

These include law firms, architects, engineers, health care companies and technology companies, he said.

Constructed of steel and glass, the 180-building would offer upscale retail on the first floor; the remaining 11 floors would each contain one to three businesses. Visitors and tenants would park across the street at the parking deck on Sixth and Walnut streets.

Spillman Farmer Architects of Bethlehem is designing the building; Serfass Development Partners of North Whitehall Township will serve as the planning and construction manager of the project.

Serfass will move to the new space and also bought other businesses to be tenants in the building, Reilly said. Officials at Serfass could not be reached for comment; it is unknown if Serfass will expand into this new space and keep open its North Whitehall Township office, or close that location.

The ability to have ownership of one’s office space is something that Reilly said would attract companies to be tenants, along with the pride of being part of the revitalization of downtown Allentown and the ability to use the NIZ tax revenues as one’s business grows.

“Those taxes can be captured to create long-term equity,” Reilly said. “The cost of the office space would be very affordable. Also, they have the ability to cross-sell their services, not just in the building but throughout the downtown.

“I think there are a lot of businesses out there that are intrigued by the idea of owning their own business.”

To make way for the new structure, four buildings will have to come down. Three are vacant and the fourth has a lease that is expiring in the next 60 days. Reilly said once that lease expires, that property would be vacant, as well.

He said he is submitting plans to the city’s planning commission and moving forward with site plans.

Source: LVB