A buyer affiliated with Liberty Property Trust on Aug. 3 paid $40 million for the lot at 1800 Arch St., ending a longshot proposal by developers to build what would have been the tallest building in Center City Philadelphia.
Seller Multi Employers Property Trust, a union pension investment fund, had paid $32 million in 2007. "We're glad MEPT made a nice profit," David Richter, head of Marlton-based Hill International Group's real estate affiliate, which had hoped to develop a 1,500-foot tower on the site, told me. "We would have preferred they hold onto the property. I think we're getting close to the end of the recession. But MEPT got a good offer, for the best piece of property in Center City."
Hopeful brokers I talked to said a likely occupant for a new building on that site would be its neighbor, Comcast Corp., whose Liberty-built and -managed Comcast Center headquarters, at nearly 1,000 feet, is Philadelphia's highest building. Comcast is looking for space and has leased parts of the former CoreStates and Bell Atlantic headquarters towers.
But it's not clear that Comcast would spend $50 a square foot for new construction, when existing Philadelphia office space is available at half that price. Comcast doesn't need the 700,000+ sq ft a big tower would create, and it would be tough to finance such a large project without other tenants.
Comcast has acquired plenty of legacy NBC Universal office space in other cities, such as 30 Rockefeller Center in Manhattan (though Philly brokers are hoping Comcast could move back-office NBC operations in North Jersey down here). Comcast already controls a site on its headquarters block that could accomodate maybe a 20-story tower, if it wants to build.
That leaves open the possibility that a Liberty financial partner is looking at Comcast or another potential tenant long-term, and sees this as a chance to control the site. Liberty held the site of Comcast's current headquarters a block away for years until the company was ready to commit.
The site doesn't fit Liberty's recent deals. With few big companies hiring or needing office space, Liberty has been selling office sites and buying warehouses.
But some large corporations are using the depressed property and construction market to update home offices on the cheap. For example, PNC Financial Service Group this summer announced a new 40-story headquarters in its native Pittsburgh.
A new tower would give Philadelphia contractors and construction workers relief from the three-year slump, especially since work ended on the Pennsylvania Convention Center expansion and Brandywine Realty Trust's 30th St. Post Office conversion earlier this year.
Hill plans to concentrate its future development energies on "hotel properties on the West Coast, resort properties in the Caribbean, and low-cost housing in the Third World," Richter told me. The former tower plan, dubbed American Commerce Center, was proposed four years ago by developer Joseph Grasso and promoter Garrett Miller. Hill replaced Grasso in the group two years ago. Miller left Hill in July and joined Matthew McManus' NAI Bluestone commercial real estate loan brokerage group.
ACC Tower would have looked ridiculous, good riddance.— FMT- I guess Comcast is about to jack up their prices again for subpar service!
That's Comcastic!— phillyfanboy - Better to build with a bird in your hand than to grab at something that is not within your reach. Comcast will almost certainly fill out most of the new building if built and now is the time to build to get low construction costs plus finance costs are lower than they have been in decades. Build on fast steam!— James
- Comcast has bought Obama, so you know that the taxpayers will be buying this one. Back when they built their current building they only owned Rendell, so all they got was an exemption from state taxes. This time around they have the Federal printing press - should be the nicest building one can buy with OPM.— Beethoven987
- [to Beethoven987] You should get your facts checked. Comcast does not have an exemption from state taxes. The Comcast Center is not part of the KOZ. — jack_johnson
- You're right Beethoven. Because the Bush regime and republicans in general really hammered Comcast on the corporate tax front.— storebrandmayonnaise
- Well, there's Liberty 1 and Liberty II, so now the COMCAST CORP. wants to be a COPYCAT...— cmuller2539
- Glad to see that American Commerce Center charade/nonsense over once and for all.
LOL. Sure let somebody else pay the freight for your misguided pipe dream that was never ever going to happen, ACC. Get real dude.
"We're glad MEPT made a nice profit," David Richter, head of Marlton-based Hill International Group's real estate affiliate, which had hoped to develop a 1,500-foot tower on the site, told me. "We would have preferred they hold onto the property.— joe smith - The Comcast Center is great from the ground up to about the 60th floor... The top of the building is just hideous though. Was hoping the ACC Tower would add something new to the skyline to shift focus away from Comcast's top.— DrexelDragonFan
- There are only 56 floors. — jack_johnson
- $50/ sq foot? no wonder nothing gets built without subsidy in this town— dreinterests
- Another political p***ing match in the blogs. Both parties are giving money away to corporations while screwing working people. Time to start a new party, one that works for the working people. We already have the business party: the republicrats.— Philly Born
- LoL...Comcast and nearly 80% of the Fortune 500 have bought Obama. Their goal is to create a fixed class society of bankers, politicians and corp. elite and the rest of us in low paying unions.— Citizenc92
- Beethoven, I don't recall that this building got tax exemption, didn't the General Assembly refuse? What Liberty got for Comcast Center was $30M+ in state money for the concourse and stores linking to the Septa station, no?— Joe D
- Non story to me unless they want tax payer money. If they build it with their own cash then more power to them.— Worker1
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