1701 Market Street - From Empty and Abandoned to First Class Reuse

Philadelphia, PA

Spaces:

252

Area:

130,000 sf

Constructed:

1998 -

Completion Value:

$8.5M

Current Value:

Sold in 2005

Developed by:

Parkway Corporation (Garage portion Only) /PRIET- Rubin

 


Partnership

PREIT-RUBIN Inc

About PREIT-RUBIN
Pennsylvania Real Estate Investment Trust (PREIT), founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls and power centers (approximately 33.4 million square feet) located in 14 states. PREIT is headquartered in Philadelphia, PA. Six Penn Center Associates, affiliates of PREIT-Rubin, were the owners of a 20 story, center city office building.

Description
In 1997, Parkway approached the owners of a prominently located Center City Philadelphia obsolete office building that had remained empty for 20 years with a concept for its adaptive reuse for parking. The potential for parking within the building allowed the owners to market the upper 12 floors and made viable the complete refurbishment of the remainder of the building into 200,000 square feet of new office and retail uses.

In late 1998 Parkway, joining in as a part of the partnership with Preit-Rubin, undertook the conversion of seven floors of the building into a new 295 car above grade garage. (Since reduced to 252 spaces.)

Parkway provided the functional design, acted as the Garage Component Development Advisor, and continues to operate the garage on behalf of the ownership.

Business Challenge
The 1701 Market Street property, ideally located for parking but logistically difficult, was being held as a prime site for the development of a major office tower. No major new office tower development had been financially viable at the site over the hold period, which resulted in the prospect of a continuing buildup of considerable non-recoupable holding costs.

The costs to raze the 20 story building, and reuse the site on an interim basis as parking, were too high, as a result, the property sat vacant. Parkway, armed with determination and a knowledge of  the parking value found a way to capitalize on this opportunity.


The Solution
In an underserved area, Parkway saw the potential to charge the highest parking rates in the city at the site after making the analysis that, surface parking would not be a viable option for this location.

Parkway's design team conceived an idea to reuse the existing building itself for parking and brought the concept to turn the first 10 floors of the building into a garage for the building owner, PRIET-Rubin.

The floors were long and narrow with a building width of just 87 feet. At first glance, that left no room to park cars if we inserted conventional ramps between the elevator core and the exterior wall. Nevertheless, we figured out a way to convert the first 10 floors into parking. Our design innovatively added ramps to the outside of the existing building to create a one-way traffic flow, self-park, double helix garage. For each revolution, the parker goes up two floors. The down flow is sandwiched on alternative floors. The internal parking layout includes both double loaded aisles with perpendicular spaces at the ends of the building and single loaded aisles with parallel spaces beside the core where the building core to window dimension is very shallow.  The configuration of the existing building core was not altered.

Value and Benefits Delivered

Parkway saw value in the location and conceived of a way to tap that value.

  • ·         The completed garage has a daily maximum 12 hour rate of $28.00 and an unreserved monthly rate of $325, both of which are the highest in the city.
  • ·         With parking now included on site, the 10 top floors of the building became very attractive to a major law firm in the city, which was seeking to relocate. The law firm signed up as a tenant and a major reuse was under way. Late in 1998, the garage opened and the tenant moved in.
  • ·         By designing the garage so as to leave the core, with the skin and structural elements of the garage floors unaltered for the parking use, the owner was able to offer the law firm the express ability to expand downwards into additional floors at will rather than at the more typical 5 and 10 year increments offered by other buildings.
  • ·         The tenant exercised an option for two additional floors before construction began and has taken one additional floor since. The garage presence and flexibility helped obtain the tenant, and the tenant in turn created significant demand for parking, increasing the value of both components of the building for the owners.