No more room at Navy Yard as Liberty breaks ground on new building

Natalie Kostelni, Staff Writer, Philadelphia Business Journal

Liberty Property Trust has been working for about a year on plans for a new building at the South Philadelphia site. Liberty has 1.25 million square feet at the Navy Yard that is fully leased and, at the same time, has 400,000 square feet of prospects that have shown an interest in relocating to the campus overlooking the Delaware River.

With that in mind and signs of an improving real estate market, the Malvern, Pa., real estate investment trust brought in a year ago Bjarke Ingels Group to design a 94,000-square-foot structure overlooking its new Central Green. It wanted the design to be special. “The Navy Yard has always been about experimenting and pushing the envelop when it comes to design and furthering the vision of the Navy Yard as a modern, exciting place,” said Brian Cohen, vice president for Liberty.

When a team of architects from Bjarke Ingels Group walked the Central Green and took at look at the Navy Yard, they felt there was a unique opportunity to design a building that engaged the park in a playful way, Cohen said. The result is a four-story structure that compliments the contours of the circular park and appears as if it’s trying to grasp it. Liberty broke ground Tuesday on the building that it is developing in a joint venture with Synterra Partners. Though it has prospects, Liberty has not signed any tenants to occupy space in the building called 1200 Intrepid Ave.

Though there are inherent risks in moving forward on a speculative building, Liberty (NYSE: LPT) is confident it’s reading the market and the desirability of the Navy Yard right. “We started the building for Iroko as a spec building and got through design and were getting ready to break ground on it when Iroko executed a lease for the whole building,” Cohen said.

That building is 56,412 square feet. Then there was the 80,050-square-foot building Franklin Square Capital Partners now occupies. It was going to be spec, too, but Franklin Square came along and took part of the building. Then, the whole thing. Perhaps, history will repeat itself with 1200 Intrepid Ave. Chances are it will. “Before we started design on the building, we started seeing users and they were asking us what we had available,” Cohen said.

Tenants in the 5,000 to 25,000-square-foot range typically start looking at options six to 12 months before their leases expire, he said. The bigger ones at 25,000 to 100,000 square feet are out 12 to 18 months ahead of the lease expiration.
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