Another Philadelphia office building has been fingered for conversion to apartments. Philadelphia landlord Ron Caplan's PMC Property Group (Philadelphia Management Corp.) has agreed to pay $8.3 million for the former AAA building, on Market Street in the middle of the city's 20th Century office district.
Caplan says he wants to build apartments and stores there, and hopes to add a tower and parking at the six-story building.
The deal is scheduled to close Friday, Robert Fahey, broker at CBRE, told me. Caplan is buying the building from creditors led by North Star REIT, of New York, which took the building over after a group of Philadelphia and New York investors who raised around $18 million to buy the building in 2006 were unable to make their loan payments. AAA moved to Delaware in 2005; the building's been vacant since then.
Fahey says the property, zoned C-5, could take "five or six times" its current 150,000 square feet of space.
Does the intrusion of housing into yet another office block (like the nearby Murano and Two Liberty condos) represent yet another step in Center City's conversion from office center to bedroom community?
"People are still gonna live in Center City," even if companies keep moving out, Caplan told me recently.
"The workforce isn't necessarily driving the gentrification of this city," says office broker Mitch Marcus, a colleague of Fahey's who leases space next door at 2000 Market, where CBRE spent $5 million last year on improvements to help fill vacancies and keep the building profitable. "The city has a positive vibe on the entertainment side and the restaurant side. People are going to make the decision to live in the city based on the amenities," not on whether or not there's more jobs available downtown.