Gary Barnett Makes a Move Into Philadelphia

No longer content with being one of the top developers in New York City alone, Gary Barnett is taking an Amtrak trip to the City of Brotherly Love for his next quest.

Extell Development purchased the Old City office building at 436 Walnut Street in Philadelphia for $30 million, the Inquirer reported. Barnett’s firm teamed with local company Chevron Property Holdings on the deal.

The purchase price came in less than the most recent assessed value of the building and was not much pricier than its last traded price of $22 million in 2004. The sale breaks down to $90 per square foot.

Insurance company Chubb was the seller of the 330,000-square-foot property. It’s in the process of relocating to an 18-story building at 2000 Arch Street, which developer Parkway Corporation plans to open in the next few months.

The Walnut Street building presents challenges for Barnett, who’s never been one to back down. Located in the Society Hill historic district, the building is protected from demolition. But it’s aging, clocking in at more than 100 years old.

Barnett will have options. A JLL team including Jim Galbally, Brett Segal and Francis Coyne marketed the property as a candidate for an office-to-residential conversion. The building already features large floorplates, plentiful windows, appropriate zoning and an opportunity for a developer to pick up a 10-year tax abatement.

Barnett could also pursue a hotel project or redevelop the property into a more modern office stock.

Extell did not respond to a request for comment from the publication.

Despite the adventure in Philadelphia, Barnett’s shown no signs of slowing down in New York City. In late January, Barnett was in contract to purchase the following: a development site at 405-415 Park Avenue, air rights from Central Synagogue and was negotiating to acquire an adjacent office building at 110 East 55th Street.

The sellers were seeking north of $500 million for the Park Avenue portion, which — with additional air rights — can support up to 700,000 square feet of rentable office space.

— Holden Walter-Warner