If the ornate Rittenhouse Square townhouse at 1801 Walnut St. now on the market for an estimated $35 million sells this year, longtime tenant Anthropologie apparently will not leave.
The women's apparel and accessories retailer has negotiated a lease extension, according to an official with Philadelphia-based Urban Outfitters Inc., which counts Anthropologie among its brands.
The retailer had been paying rent far below prevailing rates for the prime Center City neighborhood and had been under pressure to relocate or agree to new terms at loftier prices. Only then would a prospective buyer foresee sufficient income to cover the cost of acquiring the century-old corner property, which was put on the market last summer at an asking price of $40 million.
"Anthropologie has executed an additional 10-year term at 1801 and is looking forward to being a partner of the Philadelphia market and Walnut Street retail community for years to come," David Ziel, chief development officer for Urban Outfitters, said late Monday in response to a query about the rumored sale of the townhouse.
Anthropologie, which for years has occupied several floors of the 23,600-square-foot building, had fewer than three years remaining on a 34-year lease and no renewal options at rent well below market rate, according to brokers for the seller.
Ziel did not disclose details of the company's new terms with the landlord, Philadelphia Urban Investors L.P., which has put the building on the market for a price that, in nominal terms, is 40 times what the investor group paid in 1995 for the Fell-Van Rensselaer House.
But the renegotiated lease was likely to move a prospective sale forward. Brokers have said they were nearing completion of a deal and were in talks with several prospective buyers, among them Rittenhouse-area investor Allan Domb.
Anthropologie likely agreed to a significant rent increase, though nowhere near the $2 million a year reportedly sought by the landlord, said Center City retail real estate broker Larry Steinberg of CBRE|Fameco. But even at $1 million or so a year, the owner would have done well.
"I contend that the landlord is a winner," Steinberg said, speculating: "He increased his rent at least threefold."
Steinberg said he fielded a "very strong offer" from Anthropologie last year for a lease at the former Daffy's building at 17th and Chestnut Streets as the retailer sought an alternative to 1801. Instead, Nordstrom Rack was signed for 10 years to a lease totaling more than $20 million.