DiStefano: New Center City Office High-Rises Unlikely
This morning’s PhillyDeals column is titled “Are more towers on the horizon?” The answer is, “Probably not.” (I guess “More towers probably not on the horizon” is a dull headline, though.)
On the one hand, there’s phenomenal, eds-and-meds-spurred growth in University City, marked not only by Comcast’s second tower, but—as PhillyDeals’ Joe DiStefano points out—by 2.0 University Place:
Last week, the owners of 2.0 University Place, a year-old green-roofed building west of the Drexel campus, put it up for sale at $46 million, or $469 a square foot.
That’s not quite as much as the Comcast tower – but roughly three times what the city’s dominant landlord, Brandywine Realty Trust, was paying for central Philadelphia office towers just a few years back.
On the other, there’s that phrase in bold (emphasis ours), the stomach-punch of the “was” and “just a few years back.”
University City Class A office rents are the highest in the Philadelphia area, yet vacancy is low. Center City vacancy is more than twice as high—and it’s going to get higher, in a very macro way:
Center City office spaces due to go vacant over the next few years: Cigna and BNY Mellon are cutting back, Sunoco is heading to Newtown Square, FMC and Comcast will pull out of rented space for their new headquarters towers, the former GlaxoSmithKline complex at Franklin Plaza is still vacant except for a school, and nobody has signed up yet for Cozen O’Connor’s expired lease.
These emptying blocks add up to more than two million square feet, or a couple of high-rise towers’ worth.
How that does translate into an unlikely skyline boost for Center City? Find out here:
Are more towers on the horizon? [philly.com]