By Veronica Grecu, Associate Editor
MRP Residential, a division of MRP Realty of Washington, D.C., and Des Moines-based Principal Real Estate Investors recently acquired the full, 209,000-square-foot residential component of the Avenue of the Arts Building in Center City Philadelphia, with plans to redevelop the asset into high-end apartments. The new owners did not disclose the purchase price, but sources quoted by the Philadelphia Inquirer say the amount could be in the range of $29 million to $34 million—or $175 to $200 per square foot.
“By acquiring the Avenue of the Arts Building, MRP and Principal Real Estate Investors have a unique opportunity to redevelop this historic structure into a luxury apartment project in the heart of Philadelphia’s Center City,” said in a statement for the press Bob Murphy, managing principal of MRP Realty. “The immediate access to vibrant nightlife, retail, dining and entertainment options, and the proximity to top universities, hospitals and employers combine to make the Avenue of the Arts Building a prime location for a best-in-class development.”
Located at 1338-1348 Chestnut Street in one of Philadelphia’s most elite neighborhoods, the Beaux Arts style structure was constructed in 1897 as an office building. A century later it was acquired by Lubert-Adler Partners and Philadelphia Management Co. who converted the building into dorms for students enrolled at the Art Institute of Philadelphia. In 2004 New York-based Ashkenazy Acquisition Corp. bought the building for a reported $45 million, the Philadelphia Business Journal reports.
Currently the building houses around 600 students, while the first flour floors are occupied by retail and commercial tenants. The new owners announced plans to convert the residential space into 220 high-end rental units totaling around 176,000 square feet of space while keeping the existing property façade and structural system. The redeveloped building will include a state-of-the-art lobby, leasing office, fitness center, theater room, clubroom, interior landscaped courtyard and roof deck. According to the MRP Residential/Principal partnership, construction on the renovation is scheduled to start in late 2014 (after the art institute’s lease expires) with a completion date set for early 2016.
Image courtesy of MRP Residential