The Philadelphia Parking Authority has signed a 25-year lease on 77,000 sq ft of office space at 701 Market St., the former Lit Bros. department store (now known as Mellon Independence Center,) according to PPA's lawyer in the deal, Jay S. Ruder of Archer & Greiner P.C. 800 workers will move from current quarters in the Bulletin building next fall.
The deal is valued at $46 million over the life of the lease, with 30 years of renewal options. PPA will take floors 4 and 5, at $19 a square foot in the first year of the lease, plus part of the sub-basement, for coin-counting, at $10.05/sq ft. "We're in a real estate depression so we were able to lock in a good rent," and there's room to expand, said PPA spokesman Richard Dixon.
Ruder negotiated the deal "in a week," working with PPA broker Tactix Real Estate Advisors LLC, after talks with PREIT's 801 Market St. (home to the Inquirer, among others) ended in favor of another prospective tenant there.
25 years is long, for a government lease. Why'd PPA do that, given Philadelphia's long-term office surplus and low office rents? "They looked at this as a great opportunity to being in the heart of Center City," and "right near a Parking Authority-owned garage," Ruder told me.
"It's right in the heart of where our business operation is," affirmed PPA's Dixon. "It reduces our transportation costs," as opposed to trucking meter-watchers in from West Philly each day. "And it's directly adjacent to a garage that we own."