May 6. 2016. 11:39am EDT
The National Park Service and Rothman Institute are among those tenants that have signed new leases at 1234 Market St. in Philadelphia and helped bring the office building up to full occupancy.
More than a year ago, the 20-story, 670,000-square-foot building had 60,000 square feet of empty space. Some of the vacancy came available through the transportation agency consolidating operations while other portions that had been subleased became available when those tenants relocated out of the building. Some of the space had become available for the first time in a decade. While it’s usually not good to have empty space hit a building, in this case, the timing was good.
Higher rents along West Market and limited options there played a part in addition, as East Market Street has seen more development activity and grabbed the attention of other real estate investors, office tenants are increasingly gravitating to the area. “We’re fortunate to benefit from the resurgence of the Market East Corridor,” said Michael Gallagher, an office broker with Flynn Co., in a statement. Gallagher along with Brendan Flynn represented the landlord, SEPTA, in leasing the empty space.
While Gallagher declined to divulge what the building is now getting in rent, he said it’s 21 percent more than it was 18 months ago when they started looking for tenants to fill the space. Average rents in the Market East submarket are $27.13 a square foot, according to first quarter data from JLL. The National Park Service, through the General Services Administration, leased the 20th floor, which totals 33,114 square feet, and is scheduled to move into the space in the winter of 2017. It is moving from the U.S. Customs House at 200 Chestnut St. The Office of the Chapter 13 Standing Trustee for the Philadelphia region signed a lease last June on 9,695 square feet on the 18th floor. Steve Gensler of Newmark Grubb Knight Frank represented the tenant. Rothman was the tenant that closed up the remaining vacancy.
The medical provider initially leased 10,592 square feet in the building for its in-house call center for its orthopedic group and moved in this past March. Then, just last month, Rothman decided to expand into another 6,134 square feet bringing the total amount of space it leases to 16,726 square feet. The tenant was represented by Scott Martin of Markeim Chalmers Inc.
Philadelphia Business Journal