Historic jewel on Walnut could draw $35M

This story was updated at 8:30 a.m. Tuesday.

The historic townhouse that houses the retailer Anthropologie at 18th and Walnut Streets is for sale and possibly weeks away from settling for around $35 million, which would deliver a staggering profit to Robert Ambrosi and the partners with whom he bought the marquee property for $1 million in 1995.

The asking price for the four-story, 23,600-square-foot house, built in 1898, was about $40 million when it hit the market late this summer. Brokers for Philadelphia Urban Investors L.P., of which Ambrosi is operating partner, said Monday that there was interest from "several" potential buyers, but did not say who when contacted about the property's rumored sale.

"We're still talking to several investors, and we should finalize a deal soon," said James Galbally of Jones Lang LaSalle. Galbally is marketing 1801 Walnut jointly with Ken Mallin of Mallin Panchelli Nadel Realty Inc.

"This is a property that's among the most beautiful in Philadelphia," said Mallin, who has helped Ambrosi sell several Rittenhouse Square properties in recent years.

Rittenhouse Square real estate investor and developer Allan Domb confirmed Monday a rumor that he had put in an offer.

Domb submitted a bid not because the property itself offers lucrative development opportunities - construction restrictions are attached to the historic building, and its sidewalk entrance is at the top of a tall and architecturally dramatic flight of stairs, a deterrent to retailers.

The price is so high it also would require a high-paying tenant, too. Anthropologie, the women's apparel and accessories brand owned by Philadelphia-based Urban Outfitters Inc., has been paying rent "substantially below market," with less than three years left on a 34-year lease and no renewal options, according to 1801's confidential offering memorandum.

"I'm going to say it's a schmuck buy," Domb said. "The price is pretty strong, and there's no upside here."

Ambrosi, traveling in Australia, was unavailable for an interview.

But officials at Urban Outfitters appeared to have negotiated a lease extension attractive enough to secure their status as ongoing tenants: "Anthropologie has executed an additional 10-year term at 1801 and is looking forward to being a partner of the Philadelphia market and Walnut Street retail community for years to come," said David Ziel, chief development officer for the retail corporation.

Domb said he was vying for the property to firm up control over a swath of real estate he has recently assembled adjacent to the highly visible corner.

"It completes what I already have accumulated," he said, but for a "very high" price.

Domb's holdings on Walnut north of the square include the building next door, home to a Barnes & Noble bookstore and forthcoming luxury apartments above, and a nearby property that is home to the retailer Barneys.

Domb has "quickly assembled all this stuff on the square," Galbally said.

Ambrosi, who helped develop the nearby luxury condominium tower 10 Rittenhouse before losing control of it during the bust that followed the last real estate boom, is selling 1801 Walnut at least partly to cash in on sky-high prices on urban retail real estate.

"We're seeing some of the most aggressive pricing we've seen," Galbally said.

Mallin would not discuss what a future retail tenant would have to pay for the deal to go through. Nor would he say whether Anthropologie would stay or go in the event of a sale.

The Fell-Van Rensselaer House was commissioned in 1897 by Sarah Drexel Fell, widow of a Philadelphia coal magnate.

The Fell-Van Rensselaer House was commissioned to be built in 1897 by Sarah Drexel Fell, widow of a Philadelphia coal magnate.

Drexel Fell moved in in 1898 with her new husband, Alexander Van Rensselaer.

Peabody & Stearns, of Boston, designed the Beaux Arts-style house.

It has an original Tiffany & Co. stained glass dome and a ceiling with a cluster of portraits of Italian princes encircled in gold frames - both among the notable elements that have outlived several ownership changes.

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