A 15-story Center City office building at 1760 Market St. changed hands last week for $11.5 million, almost two-thirds less than the $31.5 million at its last sale in 2018. The roughly 126,700-square-foot building is relatively small, and when it was put on the market earlier this year there was speculation that it could be converted to residential use. But it is about 70% occupied, and the new owner intends to keep it as office space. The price is substantially lower even than when it was sold in 2006 for $19.3 million. “We’re starting to see the impacts of post-pandemic work patterns and the interest rate environment leading to a reset of valuation in office buildings,” said James L. Paterno, founder of Stockton Real Estate Advisors, which manages 1760 Market St. While few Philadelphia office buildings have changed hands this year, earlier this month residential developer Ori Feibush bought an office building at 399 Market St. for a sharply discounted price from its assessed value with the goal of dropping rents and attracting new tenants. The plan appears similar at 1760 Market St. “There is going to be an opportunity for the new owners to be aggressive and capitalize on providing a quality location and amenities at a different price point than was being offered a couple months ago,” Paterno said. No one involved in the deal would say who the new buyer is, and online city records have not yet been updated. Paterno would only say it is a local investor who owns other Philadelphia-area properties.
Source: Philadelphia Inquirer; 6/27/2024