Grasso Takes Graham Building for $35M

PHILADELPHIA-In partnership with the Washington, DC-based Union Labor Life Insurance Co.’s USA Realty Fund, Grasso Holdings Inc. buys One Penn Square West, also known as the Graham Building, for $35 million, or nearly $145 per sf. This is locally based Grasso’s second major Center City acquisition within two months. It is also the fourth significant office building in the Market West submarket to trade this year, and another is up for sale.

In an expansion, Grasso, headed by David Grasso, CEO, will relocate its own corporate headquarters from 22nd Street to the 25-story, class A, 241,831-sf Graham Building, which is located at the intersection of Ranstead and S. 15th streets. The Graham Co., a locally based insurance brokerage, will continue to occupy 76,812 sf in the building while Grasso will move into 10,273 sf on the 10th floor this fall.

Grasso SVP David Dinenberg tells GlobeSt.com the building is 85% leased and the asking rental rate is about $22 per sf, plus electric. Tom Kramer of locally based Jackson Cross Partners represented Grasso in the acquisition. Brokers in the New York City office of Jones Lang LaSalle represented the seller, identified only as an institutional investor. Grasso has handed leasing of the building to Josh Sloan of JLL’s local office.

One Penn Square West was completed in 1986 and is the newest building in the complex that faces Penn Square and City Hall. It was designed by locally based Cope Linder Architects, which is also a current tenant.

In an unusual transaction in mid-May, Grasso acquired floors three through eight of the building at 1530 Chestnut St. New York City-based Midwood Management retains ownership of the two lower floors, which are occupied by teen apparel retailer H&M. Grasso paid $5 million for the upper floors, which aggregate about 50,000 sf, and is investing $7 million to convert them from office space into residential rental units.

This year’s other Market West office property sales include Four Penn Center and 1818 and 1760 Market St., which traded for $208 per sf, $155 per sf, and $157 per sf, respectively. This month, without providing an asking price, Arden Group enlisted CB Richard Ellis to market Seven Penn Center.