Center City Retail Condo Trades for $5M

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PHILADELPHIA-New York City based Gould Investors has acquired a 17,367-sf retail condominium at 1500 Chestnut St. for approximately $5.2 million, or nearly $300 per sf. It encompasses the entire first and second floors of the 21-story Ellington residential condo and is fully leased on a long-term basis to Staples Inc.

A team from the local office of Cushman & Wakefield’s capital markets group marketed the space for the building owner, Jenkintown-based Pitcairn Properties. C&W senior director Jerome Kranzel tells GlobeSt.com that, “while the market for retail condominiums is well established in New York City, it is relatively new in Philadelphia.

“We had overwhelming response from many local players, but buyers in New York were especially interested,” he continues. “The prices here are low in comparison to New York and trade at low cap rates,” Kranzel says. He expects there will be more retail condo transactions in Center City. C&W senior directors James Vesey and James Sheehan also participated in the marketing and negotiations. Kranzel says Gould will pay a condo fee, “but it is relatively low, since the retail area doesn’t utilize public space in the residential portion of the building.”

Pitcairn acquired the building, then a residential rental property called Pennsylvania House, from locally based Albert M. Greenfield & Co. in July 2004 for an undisclosed price. Based on an anonymous source at the time, GlobeSt.com reported it was probably above $25 million. Greenfield developed the property as an office building in 1923.

According to published reports, Pitcairn invested $14 million in renovations for condo conversion and renamed it the Ellington. Published prices range from the mid-$200,000s into the $600,000s for bi-level penthouses. According to Greg Dwornikowski, Pitcairn’s SVP of asset management, 90 of the 160 residential units are sold or under contract.