Monday, January 26, 2015

$500M East Market Redevelopment Ready to Rise

A four-acre block, bound by Market, Chestnut, 11th and 12th streets will soon be transformed into a retail-residential development. The project, called East Market, will encompass 4.3-acres and cost approximately $500 million to build. The $230 million first phase of East Market includes demolition of the existing building at 11th and Market Street, which began in October, followed by construction of a 17-story mixed-use tower totaling 650,000 square feet. 
East Market's master plan calls for no fewer than six buildings, and will incorporate high-rise apartments, boutique offices, and a hotel.

The initial structure will include 160,000 square feet of retail space on two levels, topped by a 325-unit apartment building.

Phase I will also renovate the 200,000-square-foot family court building into retail and office space and slice the block bound by Market and Ludlow streets in half for a pedestrian promenade.

"We're going to have grocers, we're going to have restaurants, entertainment, fashion," said Jeff Kanne, CEO of National Real Estate Advisors, the $2.2 billion-asset, Washington-based firm backing the project.

The project will be built with 100% union labor, including IBEW electricians. The development team was glad to note that union crews delivered the NREA-backed tower at 2116 Chestnut Street ahead of schedule.
The $500 million-plus project is aimed at upgrading Philadelphia's worn downtown retail district and spreading Center City's apartment revival east of Broad Street.

NREA counts the International Brotherhood of Electrical Workers and other labor unions among its investors.

The partnership redeveloping Girard Square in Center City into East Market will soon begin a $20 million redevelopment of the former Family Court building at 34 S.11th Street into new Class A office space, with the organic grocer, Mom's Organic Market, leasing 16,000 square-feet of space on the ground floor.

National Real Estate Advisors, SSH Real Estate, Young Capital and Joss Realty Partners plan to totally gut the now vacant 160,000-square-foot building and install new mechanical equipment, including elevators, as well as totally redo its interior and put a new facade on the structure.

The builders will strip and replace the outside walls of the eight-story former Snellenburg department store warehouse facing 11th Street, now used by the city's Family Court.

Planned are new stores facing Market Street, lit by Times Square-style signs, that will be topped by 325 apartments - at $2,300 a month for a one-bedroom unit - with underground parking.

Retail stores are also planned for the first floor of the nearby 12-story Girard office building, with the upper floors upgraded for office, hotel, or apartments, depending on market demand.

"We're going to make Market Street cool again," said Daniel Killinger, director at NREA Development Services.

If the initial space sells well, the group plans to replace buildings in the 1100 block of Chestnut Street with new stores and apartments - bringing the residential count for the entire project to as many as 1,000 units.