PHILADELPHIA | Highrise Development Thread IX

[PHL10]

Originally Posted by Urbanthusiat

There has only been, what, 3 high-rise office buildings built in Center City since 2000? Comcast 1, Comcast 2, and the FMC Tower. Am I missing anything? Everything else has been low rise. I'd be thrilled with an 18 story office building here.

If you include FMC, you should include Cira Center but your point stands. Bigger than 18 stories would be great but I will take it. That rest of that block is nothing but parking lots and 2-3 story structures.

[iheartphilly]

Originally Posted by cardeza

It's likely not happening anytime soon- if ever- so no need even complaining about the height.

Good! When an appropriate and legit proposal comes along, it will be worth the wait. There's no reason to put something this small when it is zoned CMX-4 or CMX-5, no?

[New2Fishtown]

The reason is supply and demand. As all of these articles have touched upon, office towers are not built speculatively in this market because that's too risky of a move in a market where large tenants are few and far between and we don't predictably see growth in office-occupying sectors that translate into net positive occupancy of new square footage. So size is dictated by what tenants a developer is aware of that might be willing to pay a premium for new space, and how much space those tenants need. 18 stories may in fact be exactly how big Morgan Lewis would want/need to relocate out of its other Market West locations. From the developer's standpoint, delivering a building for that single tenant designed to their needs is far simpler and safer than trying to negotiate a similar deal with 2-3 other large tenants (assuming they exist) just so the building can be double or triple the height. It would be nice if the capital markets worked that way (freely lending huge amounts of money to developers to build what "should" go somewhere even when the demand isn't there), but they don't. It would also be nice if developers were generally more creative and aggressive, willing to say, "ok, we've only got 18 floors of office here, so let's look at apartments or hotel to max out the value of this parcel." Most developers, particularly the local set, do not think this way, and Parkway is notoriously cautious/stingy/safe. So for as long as they control this site, you are never going to see a building a) maybe at all, or at best b) one centimeter bigger than what the tenant pool dictates.

[Justin7]

Originally Posted by PHL10

That rest of that block is nothing but parking lots and 2-3 story structures.

+1

Would be thrilled with a well designed 18 stories here.

[iheartphilly]

Originally Posted by New2Fishtown

The reason is supply and demand. As all of these articles have touched upon, office towers are not built speculatively in this market because that's too risky of a move in a market where large tenants are few and far between and we don't predictably see growth in office-occupying sectors that translate into net positive occupancy of new square footage. So size is dictated by what tenants a developer is aware of that might be willing to pay a premium for new space, and how much space those tenants need. 18 stories may in fact be exactly how big Morgan Lewis would want/need to relocate out of its other Market West locations. From the developer's standpoint, delivering a building for that single tenant designed to their needs is far simpler and safer than trying to negotiate a similar deal with 2-3 other large tenants (assuming they exist) just so the building can be double or triple the height. It would be nice if the capital markets worked that way (freely lending huge amounts of money to developers to build what "should" go somewhere even when the demand isn't there), but they don't. It would also be nice if developers were generally more creative and aggressive, willing to say, "ok, we've only got 18 floors of office here, so let's look at apartments or hotel to max out the value of this parcel." Most developers, particularly the local set, do not think this way, and Parkway is notoriously cautious/stingy/safe. So for as long as they control this site, you are never going to see a building a) maybe at all, or at best b) one centimeter bigger than what the tenant pool dictates.

I like this. And, it's been said by many of us on this forum part and parcel. However, you collated it all nicely into one response. Plus, I also think the days of full-time office needs are not what they were. Many corporations allow work from home days and office sharing when doing intellectual work in front of a computer, whatnot. And, this is one reason why it has spawn new business models such as Wework.

[jsbrook]

Originally Posted by New2Fishtown

The reason is supply and demand. As all of these articles have touched upon, office towers are not built speculatively in this market because that's too risky of a move in a market where large tenants are few and far between and we don't predictably see growth in office-occupying sectors that translate into net positive occupancy of new square footage. So size is dictated by what tenants a developer is aware of that might be willing to pay a premium for new space, and how much space those tenants need. 18 stories may in fact be exactly how big Morgan Lewis would want/need to relocate out of its other Market West locations. From the developer's standpoint, delivering a building for that single tenant designed to their needs is far simpler and safer than trying to negotiate a similar deal with 2-3 other large tenants (assuming they exist) just so the building can be double or triple the height. It would be nice if the capital markets worked that way (freely lending huge amounts of money to developers to build what "should" go somewhere even when the demand isn't there), but they don't. It would also be nice if developers were generally more creative and aggressive, willing to say, "ok, we've only got 18 floors of office here, so let's look at apartments or hotel to max out the value of this parcel." Most developers, particularly the local set, do not think this way, and Parkway is notoriously cautious/stingy/safe. So for as long as they control this site, you are never going to see a building a) maybe at all, or at best b) one centimeter bigger than what the tenant pool dictates.

Yes. If Morgan Lewis is to be a/the anchor tenant, I see it much more likely they would take an entire small building than serve as the anchor of a large tower at higher rents. (the exception being KOZ and qualified opportunity zones but not sure they want to be out in University City). Personally, I am just fine with an 18 story building on this lot. If demand grows and enough tenants will pay the necessary rents, filling lots up like this will help the big boys get built in University City.

[iamrobk]

Don't work there, but as an attorney I also can't see Morgan Lewis (or any Philly law firm tbh) anchoring any sort of high-rise. Interesting they are thinking about relocating though, I always thought they had a really sweet thing going at that location. FWIW I can't see them relocating to Schuylkill Yards/University City... apparently people are Dechert are still mad they moved over to Cira Centre (they miss being in Center City, basically), and I can't imagine Morgan Lewis wanting to deal with the inevitable morale issues from that.

[Londonee]

Originally Posted by iamrobk

Don't work there, but as an attorney I also can't see Morgan Lewis (or any Philly law firm tbh) anchoring any sort of high-rise. Interesting they are thinking about relocating though, I always thought they had a really sweet thing going at that location. FWIW I can't see them relocating to Schuylkill Yards/University City... apparently people are Dechert are still mad they moved over to Cira Centre (they miss being in Center City, basically), and I can't imagine Morgan Lewis wanting to deal with the inevitable morale issues from that.

Yeah as fun as it is to look at, Cira Center must suck to work in. You're basically floating on a pedestal in the middle of a trainyard. Besides 30th Street station and some food trucks, there are only a few walkable amenities.

[iheartphilly]

^
Isn't there a Garces restaurant in the building? And, a short walk over to 30th street station for food. But, not that exciting when compared to being in CC.

[mcgrath618]

Guys, 18 stories is about 220 ft tall. I will gladly take that over what is there now. This isn't some Disney Hole site with perfect public transit access and proximity to national landmarks. This is 22nd and Market. It's a deadzone.

[Londonee]

Originally Posted by mcgrath618

Guys, 18 stories is about 220 ft tall. I will gladly take that over what is there now. This isn't some Disney Hole site with perfect public transit access and proximity to national landmarks. This is 22nd and Market. It's a deadzone.

It's 8 blocks to the busiest intermodal transit hub in the country. It's literally on a Trolley stop and within a block of thousands of residents, office workers, and hundreds of amenities. It's a 10 minute walk to Rittenhouse. I wouldn't call this a deadzone. All that said, I'm OK with 18 stories here as well.

[summersm343]

I am FINE with 18 stories here. This stretch of Market desperately needs help. There are still 3 or 4 opportunities after this is built to build something taller alone this stretch.... that's not including all of the development opportunities over the train tracks along JFK.

[summersm343]

Originally Posted by mcgrath618

Guys, 18 stories is about 220 ft tall. I will gladly take that over what is there now. This isn't some Disney Hole site with perfect public transit access and proximity to national landmarks. This is 22nd and Market. It's a deadzone.

Probably even a little taller. First floor in an office building is usually 20 feet or so. Every floor after that is usually 13 feet tall because of LEED requirements. I would say 241 feet tall for 18 floors.

[Londonee]

Originally Posted by summersm343

Probably even a little taller. First floor in an office building is usually 20 feet or so. Every floor after that is usually 13 feet tall because of LEED requirements. I would say 241 feet tall for 18 floors.

Really what I wish we'd see more of would be the mixed-use buildings similar to FMC. First 18floors for office space. And then the top 15 or so floors for luxury apartments/condos/corporate extended stay. Each with a separate, dedicated entrance.

[summersm343]

Cherry Hill software firm is moving to Philadelphia in search of tech talent

https://www.philly.com/business/wodify-ameet-shah-technology-philadelphia-20190314.html

[iheartphilly]

Parkway proposed a mixed use on Broad and Spring Garden. Cut and paste that to 23rd and market lot. This area with the Aramark HQ, Fitler Club, and some other things coming online seems ripe for something bigger. In addition to what others have said, it is also close to the Schuylkill River Trail and basically a skip and hop over to University City and Penn Health System. If the developer has not factor this in, it would be a big miss. There's so much momentum going on here- that is one of the main reasons I wanted to see more than what was proposed.

[summersm343]

Keep in mind you have Riverwalk being built by PMC two blocks away. You have PMC proposing another 32 floor apartment tower... and Brandywine planning an office/apartment tower on the 2100 block of Market. I'm sure Parkway sees all of this and figures the area may be over-saturated with apartments.

[iheartphilly]

Originally Posted by summersm343

Keep in mind you have Riverwalk being built by PMC two blocks away. You have PMC proposing another 32 floor apartment tower... and Brandywine planning an office/apartment tower on the 2100 block of Market. I'm sure Parkway sees all of this and figures the area may be over-saturated with apartments.

Yep. And, first to the market wins...which may change the trajectory of PMC or Brandywine plans. But, I suspect if they are counting on the taxpayers $5 million grant...maybe the project will stay in the proposal phase while these other two, if they are not seeking any type of grants, will happen first. And, by then, it will fizzle out all together.

[jsbrook]

Originally Posted by iheartphilly

^
Isn't there a Garces restaurant in the building? And, a short walk over to 30th street station for food. But, not that exciting when compared to being in CC.

The Garces restaurant at 24th and Walnut closed. Along with some of his other restaurants, and the remainder were sold to Ballard Brands and David Maser. Garces is bankrupt.

[PHLJD13]

Originally Posted by jsbrook

The Garces restaurant at 24th and Walnut closed. Along with some of his other restaurants, and the remainder were sold to Ballard Brands and David Maser. Garces is bankrupt.

Yes, but the (former) Garces in the Cira Centre, J.G. Domestic, is still open.

It actually does moderately well, likely by virtue of its isolation from better, more competitive options for the after-hours office crowd.