German developers acquire eight-acre Philadelphia Gateway waterfront site.
RFR Holdings Corp., a Frankfurt-based development organization, has acquired a five-block site in downtown Philadelphia known as Penn Center West, located between 20th Street and the Schuylkill River, north of John F. Kennedy Boulevard. It is adjacent to the newly renovated 30th Street Station, Philadelphia's new transportation hub. The announcement was made by William D. Fugazy, Jr., president of Koll Management Services (KMS), which arranged the transaction.
KMS Vice President Robert Greenwald represented the property's owner, Penn Center West Associates, of which H. Leonard Fruchter is managing general partner, in the transaction. Penn Center West and Fruchter assembled the site in the early 1980s and retain a participating interest. KMS will continue in an advisory and marketing capacity as RFR Holdings explores both the long- and short-term potential of the property.
"This was the perfect opportunity to purchase an extremely attractive and sizable development site with all zoning and rights in place in downtown Philadelphia," explained Aby Rosen, principal in RFR Holdings. The site has development potential of 5 million square feet, which would represent one of the most ambitious development undertakings in Philadelphia's history and involve upwards of $1 billion when completed. It will include office, hotel and retail space.
Ownership's low land costs combined with current low interest rates and stable construction costs will provide prospective tenants with very competitive rents, according to Greenwald. "In addition, for large space users having difficulty finding contiguous space in Philadelphia, Penn Center West would provide the opportunity for ownership of a technically sophisticated build-to-suit corporate headquarters at costs highly competitive with leasing alternatives," he said.
"The timing is absolutely perfect. The opportunity to develop Penn Center West is very bright, especially now that its financial structure has been stabilized," Fruchter explained. Two acres of the original 10-acre site were sold to McGuire-Thomas and IBM in 1985. Since then twin towers of 960,000 square feet each designed by I.M. Pei have been built for IBM and Con Rail.
Extensive plans for Penn Center West have been developed by Bernard Himmel, AIA. They include a dramatic 1.2 million square-foot office tower of up to 45-stories connected to a 350,000 square-foot low-rise, L-shaped galleria for a hotel, offices and retail space. A landscaped esplanade is planned between the structures and the river.
Nell Kennedy of Kennedy Capital Partners was the real estate advisor for RFR Holdings Corp.
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|Title Annotation:||RFR Holdings Corp. acquires five-block site called Penn Center West, Philadelphia, Pennsylvania|
|Publication:||Real Estate Weekly|
|Date:||Apr 13, 1994|
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