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Compared to some of the region's biggest operators, Parkway Corp. is somewhat new to commercial real estate development. But the company has a key advantage, based on the business at the core of its identity for 90 years: land.
Parkway is nearing a deal with property insurance giant Chubb for a 475K SF build-to-suit office building at 20th and Arch streets, the Philadelphia Business Journal reports. Parkway currently operates a parking lot at the site, just like it did at 22nd and Market streets, where it is now months away from completing a new headquarters for law firm Morgan Lewis & Bockius.
Chubb currently occupies just over 500K SF in Old City, just south of Independence Hall, split between the 361K SF building it owns at 436 Walnut St. and a 140K SF lease at The Washington, Keystone Development + Investment's 880K SF office property at 510 Walnut St.
Requests for comment to Chubb, Parkway and Keystone all went unreturned.
Chubb has been rumored to be in the market for a new build-to-suit office in Philadelphia since at least 2019, when Brandywine Realty Trust was reported to be offering a piece of its Schuylkill Yards development to compete with Parkway's site. Philly has the largest group of employees of any city in the U.S. for the Zurich, Switzerland-based company.
Parkway claimed to have a tenant in hand for its plans at 20th and Arch when seeking support from the Logan Square Neighborhood Association for a zoning change. LSNA ultimately supported Parkway's proposal, giving the developer the entitlements it needs to proceed if and when its deal with Chubb is completed.
Philadelphia's office leasing market has been mostly lifeless since the pandemic began, with landlords at Class-A buildings happy to spend extra money converting office space to labs for life sciences tenants where possible.
But to the extent office-using companies are willing to commit to new digs, they seem to be only interested in the absolute top of the line, as if to justify the use of an office amid mass acceptance of remote and hybrid work.
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