Historic Adaption

Dean Adler, the developer behind some of the city’s most celebrated adaptive reuse projects, has described his strategy as acquiring iconic Philadelphia buildings essentially for free. He said it plainly when discussing the Centre Square deal: “If you pay less than $100 million, you can do some pretty interesting things.”

That quote is not supposed to be hysteria. It is a precise description of a financial playbook that is reshaping Center City block by block.

Centre Square is a 1.76 million square foot office complex sitting immediately west of City Hall. It sold in 2017 for $328 million. It appraised at $471 million in 2019. PMC Property Group and Dean Adler are now buying it for less than $100 million, while $375 million remains owed on the original CMBS loan.

That is a 70% haircut from peak pricing on one of the most visible properties in Philadelphia. And it is not a one-time anomaly.

PMC bought Three Parkway at 1601 Cherry Street, a 20-story tower along the Benjamin Franklin Parkway, for $30 million in 2024. The city had assessed it at nearly $115 million. The prior owner paid $95 million for it in 2017. Then PMC turned around and bought Ten Penn Center at 18th and Market for another $30 million, a building that last traded at $75 million in 2006, worth roughly $144 million in today’s dollars.

Three landmark addresses. A combined price under $160 million for properties that would have traded for multiples of that a decade ago. So how does spending tens of millions more to convert them into apartments end up being described as free?

The Federal Historic Tax Credit program is one of the most powerful and least discussed tools in real estate development. It offers a 20% income tax credit on qualified rehabilitation expenditures for certified historic structures.

Adler has used this tool repeatedly. The Battery in Fishtown, the former PECO power plant converted into 173 apartments, office space, and an event venue, received historic tax credits and sat within a Keystone Opportunity Zone. Both were described as essential to making the $154 million redevelopment work financially. The Bellevue on South Broad Street followed the same model.

If Adler provides the philosophical framing, PMC is its most disciplined practitioner in Philadelphia.

At Three Parkway, PMC converted the lower floors into 143 apartments while retaining occupied office tenants above. The conversion is already complete. At Ten Penn Center, a zoning permit was issued in January 2026 to convert ten floors into 273 apartments. At 320 Walnut in Old City, they added 81 units to a century-old office property. Now Centre Square: up to 500 apartments across two towers plus a 300-room hotel, with Adler as the investor partner and PMC’s Ron Caplan leading the project.

The pattern is consistent. Find buildings where tenant departure has created structural vacancy. Buy at a fraction of prior value. Convert the empty floors to residential. Stack every available incentive program. Repeat.

Centre Square and the Wanamaker Building together will add more than 1,100 apartments within a few blocks of City Hall. That kind of density creates the conditions for real neighborhood infrastructure, retail, restaurants, and foot traffic that does not disappear at 6pm.

For anyone watching Philadelphia’s development market, the lesson is straightforward. The opportunity does not come from guessing which neighborhood comes next. It comes from understanding the financing tools well enough to make math work that other people cannot figure out, on buildings sitting right in plain sight.