Perhaps you’ave heard this over the last couple of years, but the COVID-19 pandemic has impacted so many aspects of life, and real estate was no exception. With the new prevalence of working from home, office towers in central business districts (CBDs) across the country have seen less use, as less space is required for businesses to operate in this new environment. Even with signs pointing to a continued recovery, it is likely that we’ll continue to see a musical chairs of companies downsizing or shifting to different locations that better suit their needs.
One such company is global law firm Morgan Lewis, which is leaving their current building at 1701 Market St. in the heart of downtown, and moving to a new edifice a few blocks to the west. Thanks to an article from the Philadelphia Business Journal, we now know that Alterra Property Group has their eyes on the 305K sqft structure at 17th & Market. As you can see, this building doesn’t necessarily jump out size-wise or architecturally amongst the throng of skyscrapers in this tallest portion of the city.
While we aren’t certain if this will be an adaptive reuse or a tear-down, Alterra does have a history of office-to-residential conversions, the most notable being 1401 Arch St. not far from here. This is a growing trend across the country, and Philly is one of the places leading the way on this pivot to residential within city limits. We think this is wonderful news for an office building that likely would need major upgrades in order to suit the needs of business clients in the current market. Adding more residential life to this business-heavy area will also keep the street life here active beyond the typical 9-to-5 traffic that dominates Market West.
As for Morgan Lewis, like we said they’re moving several blocks to the west into 2222 Market St., which we first covered back in 2020 and had the pleasure of touring this summer during construction. The design for this gorgeous tower is brought to us by Gensler, who has designed a real stunner to break up the often-utilitarian designs from the 1970s along Market Street.
This is pretty much an ideal outcome for what could have been a messy situation from a commercial real estate standpoint. Attempting to lease out over 300K sqft to either one organization or to multiple companies would be a tall order in this environment, and we absolutely love seeing more residential density on Market. We are also hoping that the relatively shallow floor plates will make for a bright and airy layout for any sort of apartment conversion, as many older office buildings create problems with deep floor plates that make light and air access difficult in the interior spaces. Assuming this happens as we’re speculating, we expect this won’t be the last office to apartment conversion we see in this part of town.