Destination Maternity sells Northern Liberties headquarters for $14M

Natalie Kostelni Reporter- Philadelphia Business Journal

A real estate company that prefers to work quietly behind the scenes has bought Destination Maternity Corp.’s headquarters in the Northern Liberties neighborhood in Philadelphia for roughly $14 million.
Alliance Partners HSP of Bryn Mawr, Pa., closed Friday on the 220,000-square-foot building at 5th and Spring Garden streets.
While Alliance Partners has initially focused on the suburbs, the company is shifting its strategy and will buy urban properties in Philadelphia. The Destination Maternity headquarters and warehouse is its first buy in the city.

The real estate company likes to find problem, in-fill properties and convert them into what Previdi calls Class A-minus office space. It’s space that looks really good without a lot of glitz and at reasonable rents, Previdi said.
The opportunity to buy Destination Maternity’s property came about when the retailer decided to relocate into a new 74,000-square-foot building it leased in Moorestown, N.J. It will move into the building, which is under construction, sometime next year.
Destination Maternity’s building on Spring Garden is a great real estate opportunity, Previdi said.
“What did it for us is the aerial,” he said about getting a bird’s eye view of the property. “It kind of hits you.”

The property is on the outer ring of Center City in a neighborhood that continues to receive investment in residential and retail projects. It’s a large site that is also within walking distance of the center of downtown.

“We’re not clear on what to do with it but we know what ever we do there value will be created,” Previdi said. But that gives Alliance Partners some freedom since its partners self-fund all of its acquisitions and redevelopment work.
The firm will initially talk to prospective tenants to see if the space might work for them. It will also explore whether residential or retail would work there or even a same-day delivery warehouse for a company.
Peter Kelsen, an attorney at Blank Rome representing Alliance Partners, said his client is evaluating opportunities for possibly rezoning the property that would open it up to other uses. It is now zoned industrial, which allows the existing use of warehouse and distribution space. Rezoning it could let the developer consider turning it into residential, commercial, office or even live-work space.
“For us, it is gold,” Previdi said. “For someone else, it’s copper.”
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