A Philadelphia developer is shifting strategies and putting a midsized apartment building on the market, indicative of the challenges facing multifamily landlords today.
Pearl Properties listed the 53-unit building at 1600 Chestnut Street near Rittenhouse Square for $25 million, the Philadelphia Business Journal reported. The listing price breaks down to $472,000 per unit.
The six-story building is 100 years old. It includes 5,300 square feet of retail space, fully occupied by Spread Bagelry, Insomnia Cookies and Wonder, a food hall expected to open its doors at the end of the summer.
Pearl purchased the building in 2011 for $11 million, converting existing office space into apartments and retail. There are 30 studio apartments and 23 one-bedroom units, yielding an average rent of $1,659.
Global Real Estate Advisors’ Ken Wellar has the listing. He suggested upgrades to appliances and cabinetry could help a new owner raise rents, describing the listing as a “rare opportunity for this type of asset” to be on the market.
Jim Pearlstein, president of Pearl, said the developer is turning its focus towards higher-density multifamily buildings. As a result, it’s been disposing of smaller properties, such as a pair of apartment buildings on Walnut Street; it sold the 22-unit 1512 Walnut for $13.5 million as well as 1200 Walnut.
Meanwhile, Pearl is moving ahead with Harper Square, its 50-story luxury development at 113-19 South 19th Street, situated across the street from The Harper, a 24-story building the developer opened in 2019.
The developer is also working on a 35-story apartment building at 708 Sansom Street in the city’s Jewelers Row. The project is for 99 rental apartments on the site. There will be two penthouses with rooftop terraces, 1,500 square feet of commercial space and 50 parking spaces on floors two through four, which will require city approval.
There is just one example of the recent multifamily transaction activity unfolding in Philadelphia. This year, Palladium Group sold majority shares in Liberty Square and Corner 2nd to Delaware-based Commonwealth Group for a combined $93 million.