$70M upgrade to telecom hotel at 401 N. Broad

The new owners of 401 North Broad St. (former North American Publishing and Packard Motor building, also where Philadelphia's Vietnam War draftees reported, and Civil Affairs cop George Fencl based his surveillance of antiwar demonstrators) will invest $70 million in upgrading the 11-story, 1.3 milllion sq ft, block-long pale-brick Internet and data carrier hotel, says Gerald Marshall, chief executive at New York-based Amerimar Enterprises. Amerimar bought 401 from New York-based Stillman Group for an as-yet undisclosed sum, in a deal also backed by Abrams Capital, lender Starwood Property Trust and investor Hunter Newby. The building is about 50% occupied by Wayne-based Sungard Availability Services, and 30% vacant.  "It's the premier telecommunications building between Manhattan and Virginia; we've got 80 carriers serving the building," including links to submarine and trans-Atlantic cables, Marshall told me. He's looking to get more telecom and colocation clients to fill the vacancies.

I asked if he feared competition from the multi-million-dollar data centers planned for places like Princeton (by Steel ORCA) and Newark Del. (by the Wolf group). "No. Data centers are complimentary, not competitive, to what we do. They're like a parking lot: they store and process data. We're an interchange: we route data to where it's going." Companies that still operate their own computer servers as well as remote "cloud-based" servers "are chasing cheap towers and single-story buidlings where you can blow the heat [that servers generate] right out the roof. We do all their connectivity." 

Amerimar and partners also developed carrier service at the nearby former Smith, Kline & French factory, 1500 Spring Garden St. "We put in $100 million after we bought that in 2000," Marshall told me. The company has since sold the property, to Nightingale Properties LLC, for a reported $184.5 million last fall (Co-Star)