About a month ago, roughly 1,300 GlaxoSmithKline workers vacated the building at 16th & Vine that was specifically built for their company fourteen years ago. With their move to a new (and really nice) facility at The Navy Yard, they left behind 225K sqft of office space on the edge of Philadelphia’s central business district that owners Liberty Property Trust had to somehow find a way to lease. Instead of attempting to find new tenants in a lousy market for office space, it seems they’re opting to sell the building.
According to the Inquirer, Liberty has an agreement in place to sell the building to non-profit DeMedici II for a measly $29M. After the sale is completed, DeMedici II will perform a $10-12M renovation to the building, and lease it to the String Theory High School for the Arts and Sciences. This charter school already has a K-8 school on South Broad Street and a Renaissance charter school in Frankford. Renovations will include the addition of a theater, labs for science courses, motion-capture studios, performance spaces, and an automotive engineering lab (does that mean car repair shop?).
The school will be admitting a 350 student freshman class this fall, and is expected to have 1,400 students at full capacity. According to the school’s website, it offers students seven “majors” in addition to core courses like math, science, english and social studies. Those majors are:
– Instrumental Music
– Vocal Music
– Digital Design and Communication Arts
– Innovations in Science & Technology
No question, this adaptive reuse is an unexpected turn for a building that Liberty surely expected would remain office space for decades. In fact, the building is even constructed to support an additional eight stories of space above the current structure, which seems likely to be rendered moot for as long as the school maintains a presence there. But looked at in the context of other office buildings like Two Liberty Place and the AAA Building being converted into residential units in recent years, we have to wonder whether the elimination of office space in Center City is becoming a bit of a disturbing trend. Sure, less inventory should translate into higher demand and higher prices, but is the market really this soft?
We’re not ready to panic just yet, but if we start hearing about condo conversions at the Comcast Building, we’re gonna officially start sounding the alarms.