WSC is trying to lure clients from outside the city. And is Mr. DiStefano coming around to this project?
Developer dangles carrot for Philadelphia tower
By Joseph N. DiStefano
INQUIRER STAFF WRITER
Joseph Grasso knows Philadelphia real estate pros and other developers are skeptical of his proposal for a 1,500-foot-tall, 2.2-million-square-foot tower at 18th and Arch Streets.
There's a recession. Banks aren't lending. He'd need new zoning, and agreeable neighbors. Big corporate tenants are so scarce that Center City Class A office rents, after inflation, have been stagnant or worse for 20 years.
"They're all good questions," said Grasso, founder of Walnut Street Capital L.L.C., which hopes to build the tower with backing from the Multi-Employer Property Trust, a labor union-oriented national landlord based in Washington whose Seattle affiliate helped Walnut buy the block last year.
Echoing a developers' lament heard often in Northeastern cities, Grasso said the project could work if he persuaded enough companies to relocate from New York, where rents last year approached $100 a square foot, to Philadelphia, where high-end rents - and the threshold developers say rents will have to pass to make would-be office projects pay - hovers in the mid-$30s.
Walnut has been pursuing investors and tenants in and beyond Philadelphia, said zoning lawyer Peter Kelsen of Blank Rome L.L.P., who represents Walnut and MEPT's asset-management affiliate. He will not name names. "We'll know in the next six to eight months," Grasso said.
In its other Center City project, Walnut has been replaced as property manager at Curtis Square, confirmed Jon Diat, spokesman for Citigroup Property Investments, Walnut's limited partner at the project.
"We made a collective decision, and it was a hard decision, to bring CB Richard Ellis in to manage the property," Grasso said. Citi felt, "and I agreed," that, as a national firm, CBRE could better sell the Curtis and Public Ledger buildings to "the big boys."
Grasso said he was still general partner at Curtis, and the buildings are more than 95 percent leased, with recent rents topping $27 a square foot.
He said it had paid off to put the buildings under new management. When they were separately owned, "they competed against each other," cutting rates to lure tenants. "Now, we don't fight each other."
Link
Prev
Besides, even though Phila needed Comcast to stay in the city, ther building is a major dissapointment in a lot of ways.
Linear Mode
