Morning Headlines: Office High-Rise on South Broad For Sale; Are Condos in Its Future?

The Trumbauer-designed building will soon be 94% tenant-occupied, but it could trade for more as a residential conversion.

Photo via Google Street View.

Photo via Google Street View.

The Horace Trumbauer-designed high-rise at 230 South Broad is on the market, according to Natalie Kostelni at the Philadelphia Business Journal. The 22-story building, which counts the Bellevue and Academy of Music as its neighbors, offers 216,000 square feet of potential office or residential space, an important distinction to make given the slight price disparity between both markets:

A rough estimate of how much it could trade for today pegs a price at about $150 a square foot, or more than $32 million. However, that calculation changes if a prospective buyer eyes the building as a potential residential conversion. It has been considered a good target for a condo or apartment use in the past because of its location, floorplates and layout.

Indeed, just yesterday we reported how Philadelphia’s office market was among the most affordable in the region. However, this difference with the residential market, investment broker Doug Rodio told Kostelni, isn’t a bad thing:

As the office market in the [Central Business District] continues to improve we have seen the price differential shrink between what a converter is willing to pay for a building and what an office owner is willing to pay for the same building,” said Doug Rodio, an investment broker with JLL. “I’d argue that this speaks more to the strength of the office market today rather than a softening of the conversion market.

230 S. Broad St. in Center City hits market [Business Journal]

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