PMC Property Group plans to redevelop the former Marketplace Design Center building at 2400 Market St. into a block-wide 22-story office and residential tower, the latest sign that Philadelphia's most aggressive development is shifting west.
The company, with real estate investment firm Lubert-Adler, is proposing 450,000 square feet of offices and 350 apartments in a building that uses the former interior design showroom center as its base, PMC executive vice president Jonathan Stavin said Tuesday.
The proposal follows last year's acquisition of about an acre of nearly adjacent land on a long-fallow stretch of west Market Street by PMC and others. It also comes amid rapid development directly across the Schuylkill around 30th Street Station, where the 47-story FMC Tower is rising.
"You're not just seeing it with us," Stavin said. "The Schuylkill . . . is going to become the new center of Philadelphia."
PMC hopes to capture current high office and apartment rents with the project, which is expected to cost more than $250 million. Asking rents for Class A office space in the west Market Street business district exceeded an average of $30 per square foot during the last three months of 2015, up 3.3 percent from the year-ago period, according to JLL, a commercial real estate services firm.
Residential rents in Center City's highest-end apartment towers, meanwhile, averaged $2,191 a month last year, a 3.1 percent rise over 2014, according to market tracker Delta Associates.
PMC's plans 2400 Market St. call for six floors of offices, filling the existing structure - which will be reskinned - and a glass-walled addition to be built on top. The building's residential portion would be built over the offices.
The company is in talks with several office users, some of which may be interested in leasing entire floors of the building, each of which is about 60,000 square feet, Stavin said. One such tenant would also have access to an attached outdoor deck.
The building's ground floor, meanwhile, would accommodate retail services such as restaurants, coffee shops, or fitness centers, Stavin said.
As part of the project, PMC would build an elevated passage along the building's river-facing wall to connect Market and Chestnut Streets, from which the reconfigured building's main entrance would be reached, he said. Crews have begun demolition at the site and are aiming for occupancy in early 2018, Stavin said.
The project seems to target the financial-service companies, law firms, and other big groups that have long occupied the high-rise district closer to City Hall, said Mitch Marcus, a JLL managing director.
The current high rents and rising demand for Center City offices make it likely that more big projects will rise on the underdeveloped blocks of Market Street between those high rises and the Schuylkill, Marcus said.
"It's the last high-quality developable swatch of land in our primary office submarket," he said. "That's why you're seeing this movement and this push."