Rubenstein Puts Wanamaker Building Up For Sale As It Stares Down 500K SF Of Potential Vacancy
One of the most well-known buildings in Philadelphia is going up for sale at a curious juncture.
Rubenstein Partners is exploring a sale of the Wanamaker Building's office portion and has retained Cushman & Wakefield to market the property, Philadelphia Business Journal reports. Rubenstein paid around $200M for a majority stake in the property in 2017 before selling the first three floors, all of which are occupied by Macy's and total 450K SF, to TF Cornerstone in 2019.
The remaining 950K SF of the formidable property, a National Historic Landmark built in 1911, is office space that was 96% occupied when Rubenstein purchased it. In late 2020, the General Services Administration vacated 229K SF occupied by the Army Corps of Engineers and the Department of Housing and Urban Development, moving to 1650 Arch St. and 801 Market St., respectively, PBJ reports.
Children's Hospital of Philadelphia has exercised its option to terminate the lease for the 300K SF it occupies in the building, which it had expanded by 50K SF in 2019, PBJ reports. The hospital system seeks to centralize more of its operations close to its base in University City, but it has not made a final decision on whether to retain some of its space with a new lease.
Rubenstein principal Stephen Card told PBJ late last year that the company was aware of the possibility that CHOP and GSA would both vacate when it purchased the property, and that the knowledge was part of the motivation to spend $30M on capital improvements to the building. Card told Bisnow in January 2019 that the improvements were made with the goal of retaining and improving occupancy, rather than driving rents. Since the improvements were completed in 2019, rents have increased by $10 per SF, PBJ reports.
Early last year, Rubenstein leased 42K SF to coworking operator Mindspace, and it has been exploring the property's potential for conversion into life sciences space to capitalize on the prevailing trend in the city, PBJ reports. If the building proves capable of supporting the greater infrastructure demands of lab space, it could theoretically boost the building's value.
Amerimar Enterprises has owned a stake in the Wanamaker Building since 1997, according to the Philly-based company's website, and remains in place as a managing partner. Neither Rubenstein nor Cushman & Wakefield immediately responded to requests for comment.