Congratulations, PREIT–the Gallery Is All Yours

As of yesterday, Pennsylvania Real Estate Investment Trust (PREIT) officially owns the Kmart at Ninth and Market–the one it paid $60 million for even though many area residents wouldn’t shop there regularly if you paid them $60 million to do so. (They’d be missing out on some serious bargains, however.)

What does this mean? PhillyInc’s Mike Armstrong breaks it down:

The deal means one owner controls all of the real estate that makes up the Gallery at Market East, which stretches from a Burlington Coat Factory store at 11th and Market to the former Strawbridge & Clothier store, where The Inquirer is now a tenant.

Kmart’s lease expires in 2014, however, which is when things will get really interesting. Don’t look for future plans on PREIT’s website: A note reads, “Please contact the property’s Leasing Representative for the most updated lease plans.” We read this as: The Gallery, as you know it, will be no more. We could be wrong. But probably not.

Certainly, the Gallery is at a pivotal location for Center City development, and for the development of Market East, with which Mayor Michael Nutter is very concerned. It’s also extremely, shall we say, relevant to Market8, the casino proposed for Eighth and Market. PREIT is co-owner of the Market8 land, so the ownership of the Gallery makes it a bit of a streak for PREIT if they get that license.

PhillyInc: PREIT now controls three blocks on Market Street