Phone | 267.322.5020
Fax | 267.322.5022
Sales Center Hours:
Monday - Sunday 11am to 4pm
«Back to Press
OFFICES TURN INTO RESIDENCES
In Center City developers recycle old treasures as luxury apartments.
-Henry J. Holcomb
The Philadelphia Inquirer, July 22, 2002
View Article as Printer Friendly PDF
The old Insurance Co. of North America headquarters – built in 1925 as a monument to the company’s global prominence – is coming back to life as an upscale apartment building called The Phoenix.
The 20-story building, now one-third occupied, is the first of four luxury apartment buildings coming on the market over the next year that are expected to strengthen Center City’s appeal to upscale empty nesters and young professionals.
These buildings, with a total of 1,050 units, also will test the downtown area’s ability to keep filling apartments as fast as they are built.
Until now, an apartment building in Center City has come mainly through conversion of factories and office buildings for the middle market.
The Phoenix, “a prestige building at a prestige location,” would strengthen Center City’s ability to attract prosperous couples whose children have left home, said Paul Levy, executive director of the Center City District, a municipal services and economic development agency.
The 19 th-floor ballroom-sized INA boardroom, with its two fireplaces and chandelier, forms the living room of the largest apartment, which will rank among the city’s grandest. It rents for – well if you have to ask you probably can’t afford it.
But the other 266 apartments in the 20-story building are marketed to empty nesters and single young professionals – the demographic groups that have driven Center City’s population up 5 percent, to 79,000, over the last decade, while overall the city’s population was declining by 4 percent.
Center City’s growing popularity with empty nesters and singles is important: These are the fastest-growing segment of the U.S. population, Levy said.
Philadelphia trails only New York and Chicago in downtown population, and real estate professionals say that Center City’s growth will continue.
“This city is more vibrant than ever,” said Albert M. Greenfield, who two years ago converted an office building to 162 luxury apartments, all now occupied at Pennsylvania House, 1500 Chestnut St. “I had dinner [the other] night at the Striped Bass, and when I came out Walnut was packed. The stores are staying open later…Philadelphia is getting closer to being a 24-hour city.”
The 1,000-plus new luxury apartments – “at higher rents than Philadelphia is used to paying – might cause occupancy rates to dip, but not for long,” Greenfield said.
The other luxury apartment buildings under development are the Packard building, an office building being converted by Metro Development Co., of Philadelphia, at 15 th and Chestnut; Dockside Residences at Pier 30, built by the DePaul Group of Blue Bell on the Delaware River; and the 47-story St. James apartment tower by P&A Associates, of Philadelphia, at Washington Square, Eight and Walnut streets.
In addition, Mariner Commercial Properties, of Bala Cynwyd, is planning a 50-story luxury apartment tower at 15 th and Chestnut. When finished in 2004 or early 2005, it probably will have 338 large residential condominium units, said Timothy J. Mahoney, Mariner’s developer.
Even as the economy has slowed, Center City apartment occupancy rates have remained around 98 percent, said Gregory Webster, chief operating officer of Philadelphia Management Co., which owns 5,000 of Center City’s 23,000 rental units.
But the rental-rate increases of recent years “have settled a bit,” Webster said.
Until that settling began, rents in Center City had been skyrocketing. A Center City District survey said the average monthly rent for a two-bedroom apartment jumped from $1,342 in 1999 to $1,866 in the most recent survey last year. One bedroom units rose from $962 to $1,230 in the same period.
Early data from this year’s survey suggest that the one bedroom average is now above $1,480, the Center City District’s Levy said.
David Grasso, president of Metro Development Co., said he remained confident that the 153 luxury units in his Packard building, with its indoor pool and other high-end amenities, would rent quickly, beginning in March.
He cited a recent Merrill Lynch& Co. Inc. study rating Philadelphia as the nation’s only strong market at a time when most are assessed as weak or distressed.
Like those for The Phoenix, Grasso’s rents will average about $2 per square foot a month.
The Phoenix, at 1600 Arch St., offers a range of prices. There are studio apartments for as low as $1,200 a month, and an array of one-bedroom units, some with dens.
And there are large two-bedroom apartments, some with outdoor patios overlooking LOVE Park and the Benjamin Franklin Parkway, from $2,900 to $3,100 a month. And there will be a concierge to help with an array of tasks, from getting theater tickets to hiring a dog walker. As for the cost of the grand unity that includes the boardroom, it depends on whether adjacent apartments are included and the details of finish and fixtures that the tenant desires.
The Phoenix has been restored by Daniel J. Keating, III, one of the regions leading builders. He bought and restored the building, at a total cost of $76.7 million, in partnership with a pension fund for union plumbers and pipe fitters.
At The Phoenix, the architects at Bower Lewis Thrower of Philadelphia have retained many ornate features created by INA, which in its heyday was the Microsoft of the property and casualty insurance industry. The company merged in 1982 with Connecticut General. The merged company, known as Cigna, moved in 1989 to nearby Two Liberty Place.
The Phoenix’s bottom three floors will be offices and retail space – including a restaurant and bank. To work with existing walls and features, the architects created 267 apartments of many sizes and shapes. “There are no ‘typicals,’” Keating said, touring the building last week.
On the top floor, with its two story high ceilings and windows, the architects created loft apartments. The configurations of some other floors required two story town houses.
The Phoenix is an easy Parkway jog or bike ride to Kelly Drive and the trails along the Schuylkill and Wissahickon Creek. “It seems like every resident so far has at least one bike,” Elizabeth LaMent, the property’s manager, said. Thus, she is adding a street-level bike room.
There is a party room and outdoor terrace that residents can reserve for sit down dinners or receptions. For those who run a business at home, there is a conference room and computer quipped work area. And the apartments are wired high-tech.
“You can have Comcast in one room and Satellite TV in another…as well as Ethernet and DSL. There’s no daisy-chaining – every outlet is wired back to a communications closet on each floor,” said Skip Gosnell, president of In4Structure, Keating’s technology unit.
The early response from Phoenix residents has been positive.
Ted McMerty, a veteran lawyer, was among the first to move in four months ago, and is testing downtown living for the first time. He said he loved the view of City Hall and LOVE Park from his seventh-floor apartment, and the luxury hotel touches, such as free morning coffee and Danish in the lobby.
And, he said, the two-block walk to work beats his former nerve-wracking 45-minute commute from Lafayette Hill.
Anthony Fratianne, who moved in last week from Cincinnati to begin his law career at one of the city’s big firms, is living in an apartment for the first time. “It is unbelievably beautiful…and quiet”, he said, “It’s like you are in a four star hotel.”