UPDATE: Says Keystone boss William Glazer, who in partnership with Mack-Cali has agreed to pay $125M for the Curtis building on Washington Square and is adding apartments to the underused office tower: "We're going to where the puck is going to be, and the neighborhoods around Market Street East are booming. We see all the money chasing cool, transformative stuff. Well, if you were to pick Ground Zero in that corridor, it would be on Washington Square, and it would be this building, the Curtis Center.
"That's an art museum quality lobby on the east side, with the Tiffany glass mural. The 'aha' moment was standing there with our partners at Roseland-Mack-Cali, and saying, 'Wouldn't this be amazing as the entrance to a residence?' Look at the dimensions on that side of the building, they are perfect for apartments. (Indeed, some suites were Curtis family apartments, back in the day, according to Italian consul Andrea Canepari in Curtis' neighboring Public Ledger building.) We haven't owned it a week and the phone's ringing off the hook."
How does Washington Square compare to Center City's long-premier Rittenhouse Square? "Conventional wisdom was that you would go to Rittenhouse Square for your social life and you go to Wahsington Square to live. That's what it was. But I'm saying there can be an equal amount of social life and activity on Washington Square, where you have a whole block of Walnut St., and 25 percent of the square's total frontage, under one façade." Which now belongs to Glazer and his partners. (Like the nearby Dow/Rohm and Haas building, where Glazer's partners are currently building a beer garden.)
EARLIER: Keystone Property Group, Bala Cynwyd, and North Jersey-based Mack-Cali Realty Corp. say they have jointly purchased Curtis Center, an underused Independence Mall office building with a soaring stone atrium and a Maxfield Parrish stained-glass window in the lobby, for $125 million in cash and will replace some office suites with "luxury apartments."
Mack-Cali has sold dozens of aging Philadelphia-area office buildings to Keystone over the past year but has said it wants to stay in the area as an apartment developer. Keystone boss William Glazer says he hopes to add younger office tenants by converting surplus space to restaurants, apartments and other features he calls "lifestyle-oriented" or "live-work-play", alongside office updates. Tenants include the U.S. General Services Administration. Glazer and his partners plan an initial 90 apartments averaging 1,000 sq. ft. each, and maybe more as office leases expire.
The complex and the neighboring Public Ledger Building were updated in the 1980s but have seldom attracted full occupancy or above-market rents in recent years. Citibank bought the two buildings for $137 million in 2006; they were later acquired as part of a large portfolio of Citi real estate by Sixers owner Josh Harris' Apollo Global Real Estate, which put them up for sale three years ago.
Curtis Center lies "in the heart of the growing Philadelphia housing market," said Mitchell E. Hersh, president and CEO of Mack-Cali, whose founders include Earle Mack, former name donor of Drexel University's law school, in a statement.
Besides apartments, the partners plan to add restaurants with outdoor seating along Washington Square and Independence National Historic Park, upgraded elevators, heating, air conditioning, parking and roofing. A Keystone affiliate will run the restaurants and stores; Mack-Cali's Roseland unit will develop and lease the apartments.
In the early 1900s, the building was the sumptuous home of Cyrus Curtis' publishing empire, which included the Saturday Evening Post, the largest-circulation U.S. magazine in the early 1900s, as well as the Inquirer and many other publications, filling 85,000 sq. ft. and a whole city block and attracting related businesses like the pioneering N.W. Ayer ad agency across Independence Square. (The Curtis empire also included the company's Curtis Park, Delaware County, printing complex, a fleet of electric vehicles, even a paper mill in Newark, Del.)