Posted Sep 21, 2020, 6:56 PM
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Join Date: Jul 2014
Posts: 770
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Quote:
Originally Posted by Jawnadelphia
The official groundbreaking was this morning - I'm not seeing any news coverage, but it happened.
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$200M office project at 2222 Market in Center City gets underway
https://www.bizjournals.com/philadel...ladelphia.html
Quote:
It’s with little frequency Philadelphia experiences a ground breaking for a new office building let alone one in the middle of global pandemic but, in a city of firsts, that is what took place Monday morning along the western edge of the Central Business District.
Parkway Corp. marked the beginning of construction for 2222 Market St., a $200 million office tower that will house the headquarters of law firm Morgan Lewis & Bockius. Last December, Morgan Lewis signed a 20-year lease for the development of what will be a 19-story, 305,000-square-foot building that the law firm will fully occupy.
“Morgan Lewis is making a statement with this project and this part of Market Street,” said Rob Zuritsky, president of Parkway, before an audience of masked, socially-distanced attendees.
The project is forward-looking. It looks to a future when companies and employees can safely return to their offices. It confirms the law firm’s commitment to its own future, and it’s a recognition of Philadelphia’s future.
The building will stand as a monument to Philadelphia’s spirit and confidence in what’s to come, said Sarah E. Bouchard, managing partner at Morgan Lewis’ Philadelphia office.
Parkway managed to secure $187 million in financing in August from a cadre of lenders to move forward with the project. Meridian Capital Group arranged construction and mezzanine loans as well as preferred equity with Acore Capital. Santander Bank, Citizens Bank and Fulton Bank were also part of the capital stack.
“We had financing and all of the terms locked up, but then two or three things changed during the process,” Zuritsky said of complications created by the Covid-19 pandemic. “There were new concerns from lenders that they never had before. What happens if there is another shutdown? What happens if supplies coming out of other states have a shutdown? All of a sudden the deal terms changed a little bit. They didn't necessarily get better and required more reserves. It was new. New 'What ifs.'”
Another unforeseen challenge spurred by the coronavirus involved getting a few routine approvals finalized with the city before construction could move forward.
“They were no-brainers but then everything shut down,” Zuritsky said. “We had four to five months when the city wasn’t doing anything at all.”
The city eventually moved procedures online and through virtual meetings those final approvals were completed.
The timing actually works in Morgan Lewis’ favor. If it happened six months earlier, the firm wouldn’t have the opportunity to take a pause and re-evaluate the interior of the office space through a new lens brought on by the coronavirus and employees working from home, said Eric Stern, a partner at Morgan Lewis and co-leader of its real estate practice.
“This gives us the ability to recognize the post-pandemic workforce, how they look at work differently and treat going into work differently,” Stern said. “We have an opportunity to make changes.”
It’s too early to disclose what those changes might be since they are still being debated.
The new office tower continues a western shift of Philadelphia’s office market that has been slowly but steadily gaining traction since Comcast Corp.’s new headquarters went up and additional buildings such as Cira Centre, FMC Tower at Cira Centre South, and other development took place on the other side of the Schuylkill River near 30th Street Station. While Independence Blue Cross has had a long presence in that part of the West Market Street corridors, newcomers include Aramark Corp. and Entercom Communications Corp.
Anne Fadullon said when she took the job as director of planning and development for Philadelphia five years ago, she was asked when the next ground-up office building would be built. “This took a little longer than what I was hoping for,” she said.
Their follow-up question should have been whether she thought it would be built during one of the nation's biggest economic downturns. That it is happening at this time "really illustrates the resiliency of the city,” Fadullon said.
IMC Construction is the general contractor for 2222 Market, Gensler is the architect, and JLL represented Parkway. The project is expected to be completed sometime in 2022.
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