We recently got an email from a reader asking about the weird vacancy on the corner of 40th and Chestnut Sts., across the street from Distrito.
For those of you unfamiliar with that corner, the Hub is the prominent building anyone would notice right away. It was constructed almost five years ago on the northeast corner, replacing some low-rise commercial buildings with a ten-story mixed-use building with market-rate apartment rentals and high-end retail tenants like Distrito and Jean Madeline/Aveda Institute. The building was designed by Piatt Associates and probably splits the critics in the architectural community with its unique post-modern design. It was built by Teres Holdings LLC, through a long-term land lease with Penn- similar deals were struck with the Hanover Company, which recently built the Radian on the 3900 block of Walnut St. and the Domus, at 34th and Chestnut Sts. According to Paul Sehnert, Director of Development Management at Penn, the Hub is 100% occupied with outstanding rent numbers.
So there’s this successful new building on the northeast corner, and look at what’s across the street.
So what’s going on here? We learned that the lot on the northwest corner is owned by Penn, along with several additional lots to the north and west. From what we understand, the original plan was for Teres to develop two Hubs, one on the northeast corner and a second on the northwest corner, to be constructed after the first Hub was completed. And we’ve all heard the familiar refrain by now: Bright plans for development, bottom falls out of economy, capital becomes scarce and expensive, plans fall apart. Sigh.
While Teres Holding’s land lease at the northwestern corner has expired, both parties are hopeful that they’ll be able build on the site in the near future. In the meantime, it’s likely that the storefronts will remain vacant- just no reason to make any improvements to a property that will definitely be torn down sometime soon.
And one more thing: We’ve heard some whispers about a possible second phase at the Hub that’s already built- we’ll be sure to update once we get a little more information on that.