Friday, February 4, 2022

Philadelphia Apartment Tower Trades for Market High of $233 Million

 By Linda Moss CoStar News

An apartment high-rise in Philadelphia has sold for $233 million in what's being touted as the largest single-building sale in the history of the city's multifamily market.

In its first acquisition in Philadelphia, private equity fund Fairstead of New York purchased 1500 Locust St., a 612-unit property, from Barings Real Estate Advisers, which is based in Hartford, Connecticut, according to the broker on the deal. The 45-story mixed-use building is located in the Rittenhouse Square area.

The transaction marks a new high for a multifamily sale of its kind in the City of Brotherly Love. It tops one in 2015, when 2116 Chestnut St. sold for $156.6 million, according to CoStar data.

In its most recent report on multifamily in Philadelphia, CoStar said investment volume remains about half of 2018-19 levels. But there's a silver lining.

"The most recent deals still show intense investor demand for large apartment properties and no significant decline in pricing as a result of the coronavirus crisis. In fact, most deals are showing significant gains in pricing compared to pre-pandemic levels. As was the case prior to the pandemic, New York and Lakewood, New Jersey-based buyers remain a leading source of investment into Philadelphia's apartment market."

Sales volume for U.S. multifamily properties totaled $78.7 billion during the third quarter, the largest quarterly sales figure on record as demand for multifamily properties continued to surge. The third-quarter volume marked a 31.4% increase from the prior quarter and a 192.1% year-over-year increase. For the 12 months ending with the third quarter, the greater Philadelphia area totaled $2.2 billion in multifamily sales volume.

The Locust Street property has 828,679 gross square feet, with 7,770 square feet of street-level retail and a 398-space parking garage. The tower features a mix of studio, one-, two- and three-bedroom units with an average unit size of 852 square feet. Its amenities include a resident lounge with a catering kitchen, a fitness center, a 10-seat theater room, a glass-enclosed heated rooftop swimming pool with retractable windows and a roof deck with private cabanas and grilling areas. The street-level retail is occupied by two full-service restaurants, Blume and Fado Irish Pub.

The high-rise, on the corner of 15th and Locust streets, is at the junction of three Center City neighborhoods — Rittenhouse Square, the Avenue of the Arts and the West Market Street office corridor.

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