Monday, September 14, 2015

Design Center Leases 48,000SF at East Market Development

by Steve Lubetkin,
The Design Center, Philadelphia’s premier resource for the interior design trade, will lease 48,000 square feet at 34 South 11th Street, a class A, modern office warehouse building within the 4.3-acre East Market development.

As an indication of further confidence in the demand for contemporary office space in Center City, the development team of National Real Estate Development say they have also closed on a $38.5 million construction loan from Wells Fargo to continue the renovation of 34 S. 11th Street.

“East Market and The Design Center are both committed to providing one-of-a-kind products and experiences to the Philadelphia community,” says Daniel Killinger, managing director of National Real Estate Development, one of the project’s partners. “East Market will be a place for the creatives, innovators and young professionals who value design and originality, and want to be in the center of it all. The Design Center showrooms perfectly complement our vision for this historic and transforming section of Philadelphia, and we are delighted to welcome them to East Market.”

“The commitments of Wells Fargo and The Design Center to East Market’s office space illustrate the momentum and explosive growth east of Broad Street. We are seeing a strong demand for East Market’s modern office space, which was designed to cater to the new, collaborative workplace model. This type of space, at this scale, simply doesn’t exist anywhere else in Center City.”

Located in the Marketplace building at 2400 Market Street for 30 years, The Design Center has become a Philadelphia staple for trade professionals. Independent showrooms provide designers with luxury furnishings from highly regarded manufacturers and distinguished brands, with some products available for purchase by consumers.

“The area east of Broad Street has become the vibrant heart of Philadelphia’s design community, with so many designers, architects and furniture stores calling it home,” says Gregory Augustine, a local owner of The Baer Collection showroom at The Design Center. “In moving to East Market, we have the opportunity to make our showrooms even more accessible to the design community and Philadelphia consumers and to create a ‘design hub’ right here in Center City.

The Design Center will include The Baer Collection, Beatrice & Martin, Croce, AK & CO, Harrington Group, Kravet, Pindler & Pindler, Robert Allen and Scalamandre. The showrooms will temporarily move to 15th Street and Juniper Street this month, and will open at East Market in the fall of 2016. The Design Center also has the opportunity to expand into an additional 24,000 square feet as the business grows. And that is their plan.

“In selecting a new location for The Design Center showrooms, we knew it was critical to find a place with an energy and creativity that fit our business,” says Lisa Kravet, vice president of Kravet, one of the showrooms currently in The Design Center. “East Market is already a dynamic urban environment, and with this move, each showroom has the opportunity to be part of a completely new Philadelphia experience. We needed a new space that was highly visible, customizable and offered room for growth, and we are thrilled to have found that within East Market.”

The $500 million East Market development will span an entire city block, blending new-to-market retail and dining experiences with contemporary apartments to create a thriving urban destination for locals and tourists. 34 S. 11th Street, formerly home to Snellenburg’s warehouse, is currently being transformed into collaborative, contemporary office space featuring large open floor plates, high ceilings and full height windows. The building’s tenants, The Design Center and gourmet grocer MOM’s Organic Market, are poised to draw both shoppers and professionals to the East Market corridor, playing a central role in bridging the historic and business districts for the first time.

The $38.5 million construction loan secured from Wells Fargo will fund the continued renovation of the 34 S. 11th Street building. This investment, combined with The Design Center’s leasing agreement, represents an important milestone for East Market and a growing trend in the Philadelphia office market.

“Wells Fargo is excited to finance 34 S. 11th Street, given East Market’s potential as a transformative noted of urban mixed-use development,” says Bill Jordan, senior vice president of Wells Fargo-Commercial Real Estate. “Moreover, the financing deepens our relationship with National Real Estate Advisors, which has a demonstrated track record of activating under-utilized, transit-oriented sites in communities across the nation.”

As the first project to secure financing and begin construction, East Market has become the leading development along Market Street in the East of Broad revitalization.

Phase one of East Market, encompassing 34 S. 11th Street and additional buildings along Market Street, will open in the summer and fall of 2016. East Market is developed by National Real Estate Development and owned by National Real Estate Advisors, JOSS Realty Partners LLC, Young Capital LLC and SSH Real Estate.

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