Office Building Confoundia
The rise of in vacancies across office buildings downtown have led to staggering corrections across properties.
As reported by the Philadelphia Inquirer, the old GSK headquarters has now sold for $52 million dollars, a massive 60% haircut from its 2018 price. This would certainly be alarming if there weren’t so many other similar examples. 1701 Market St, the Wanamaker building, and an assortment of smaller office buildings slated for adaptive reuse continue the trend.
This is the new normal, scary as it may be.
Rising from the ashes are a slate of multi-family projects which we hope will maintain the vibrancy, the character, and the tax revenue of this real estate. There are two things that I find most interesting about this news though:
That the building appears to be going to the Carpenter’s Union who would continue to use it as an office building (I suppose this isn’t too crazy given its location)
Whether or not it will receive Keystone Opportunity Zone incentives like other prominent companies in the Navy Yard
Time will tell if this will prove to be one of the low water marks on office buildings, or if prices will continue to drop.
