Ground has finally been broken at the vast lot on South Broad Street where developer Bart Blatstein has long proposed a big apartment complex — just not by Blatstein alone.
Post Bros., the same Philadelphia real estate firm that largely took over Blatstein’s planned expansion of the Piazza apartments in Northern Liberties, has joined with the developer as managing partner of a new entity that’s building up the site at Broad Street and Washington Avenue.
Work began last month on the 1,487-unit apartment project that’s scheduled for completion in about two years, Post chief executive Michael Pestronk said in an interview Wednesday.
Pestronk said his firm was drawn to the project site by its size — more than four acres — which allows Post to develop many units without having to construct tall towers, which are more expensive to build.
“We liked the scale because of the economics it allows,” he said. “We were able to build mid-rise construction types that make this project economically feasible.”
The $305.7 millionproject adds to the more than 6,500 apartment units across central Philadelphia that were under construction as of the end of last year, according to data from real estate tracker RealPage Inc. There are about 41,800 existing units in that area, largely bounded by the Delaware and Schuylkill Rivers, between Tasker Street and Girard Avenue.
Philadelphia is “a desirable place to live and it’s only becoming more so every single day,” said Pestronk, whose company owns property comprising 5,000 apartment units across the city, including the Presidential City Apartments on City Avenue near I-76 and the Goldtex building north of Center City on 12th Street.
“The apartment market has been very healthy for as long as we’ve been in business,” Pestronk said.
Construction is getting underway at Broad and Washington about eight years after Blatstein disclosed his agreement to buy the property at the southern gateway to the South Broad Street enclave known as Avenue of the Arts.
That deal wasn’t consummated until 2017, when Blatstein paid $19.6 million to a unit of Hudson Realty Capital LLC of New York after the settlement of litigation over whether the Philadelphia developer had let the agreement lapse.
In the meantime, Blatstein had released an early proposal for the site that consisted of a 34-story apartment tower over four levels of retail and parking. The retail-and-parking floors were to be topped with kiosks comprising what Blatstein characterized as an outdoor shopping “village.”
That vision was never realized. Instead, Blatstein reemerged in 2020 with a proposal that was approved by the city last summer and now forms the basis for Post’s development plans.
Those plans call for a grid of interlocking nine- to 13-story mid-rise apartment buildings over commercial space that is to include a Giant Co. supermarket, Pestronk said. Parking for the apartments and shops will be set underground, he said.
Records show that the property changed hands in May, passing from Broad and Washington LP, a Blatstein subsidiary, to BW Property Owner LLC, which shares a Northern Liberties address with Post.
Another company sharing Post’s address, BW 2 Property Owner LLC, simultaneously bought another Blatstein-owned property to the tract’s immediate east at 1223-45 Washington Ave. Permits were issued late last year for an 11-story building with 375 dwelling units on that site.
Ryan McCaffrey, general counsel for Post, signed off on a $52 million mortgage on the two properties from New York-based Terra Property Trust, records show.
The new Post-led entity that’s managing development is a 50-50 partnership with Blatstein, Pestronk said. Post didn’t pay in cash to join the venture, and is instead taking on responsibility for getting construction financing and managing the project’s execution to meet its end of the bargain, he said.
It’s not the first time that Blatstein has shepherded a project on land he owns through the city’s permitting process before teaming up with Post to develop it. In 2019, Post acquired a controlling interest in a roughly four-acre parcel at 1104 N. Hancock St. in Northern Liberties from Blatstein after the developer spent more than a year obtaining permits for 861 apartments at the site.
The property, which Post is now developing under the name Piazza Terminal, had long sat on the fringe of the complex once known as Piazza at Schmidt’s. Blatstein built that in the early 2000s and later sold it to a venture involving Kushner Cos. Post acquired Kushner’s stake in the complex for $44.1 million in May 2018.
“I’m super excited about this transformational gateway project,” Blatstein said of the Broad and Washington plan. “The Post Bros. are great guys and I’m excited about working with them again.”