Pearl Properties is buying Latham Hotel, plans 144 apartments there

Real estate investment and development firm Pearl Properties is purchasing the Latham Hotel at 17th and Walnut Streets, with plans to convert the property into an apartment building.

The conversion, set to be complete by summer, will put 144 rental units in the 14-story building, with retail on its ground floor and mezzanine level, Reed Slogoff, a Pearl partner, said Wednesday.

"It's a great location," said Slogoff, whose company also is developing a 32-story residential tower project at the site of the former Boyd Theater nearby. "We own a lot of properties in the area."

Pearl will close on its purchase of the Latham on Tuesday, Slogoff said. The hotel's final guests will check out a day earlier, said Latham general manager Ross Black.

A permit application on file with the city states that the apartments would be on the third story and above, and that the first floor would accommodate a restaurant and "financial services," with shopping on the second floor. Slogoff said specific plans for the lower levels had not been finalized.

The conversion will return the structure to its original use: It was completed in 1915 as an apartment building.

The Latham was converted into a hotel with 130 guest rooms in 1970, with later upgrades making it the city's first modern luxury property by the end of that decade, said Peter Tyson, a senior vice president at PKF Consulting/CBRE Hotels.

Ocean Properties, which acquired the building in 1995, completed what it described as a multimillion-dollar overhaul in 2011. It is now selling the Latham, its only Philadelphia asset, in the face of growing competition among high-end hotel accommodations in the city.

The Latham is barely a block away from the Kimpton-owned Hotel Palomar and the site of a planned Hyatt Centric property. In walking distance are the future sites of SLS and W hotels and the city's new Four Seasons atop the Comcast Innovation and Technology Center.

"It's going to become much more competitive in the next two to three years," Tyson said. "I think somebody just saw a brighter future to do residential there."

Deborah Howard, an Ocean Properties executive assistant to whom questions were referred, did not respond to an email seeking comment.

Slogoff said Pearl had not yet decided whether the building will retain the Latham name.

The property adds to Pearl's growing portfolio of apartments around Rittenhouse Square, one of Philadelphia's most lucrative areas for residential landlords.

Rents within the neighborhood, bounded largely by Market, Broad, and South Streets, and the Schuylkill, are 84 percent higher than the city's median - in September, $2,191 a month compared with $1,188, according to the most recent data from real estate website Zillow.

"It just turned out that the economics to convert it to residential were more compelling than running it as a hotel," Tyson said.

jadelman@phillynews.com

215-854-2615@jacobadelman