The owners of Center City's Lit Bros. building are restoring the former department store's historic moniker, as its main tenant - Bank of New York Mellon - slims down its presence at the site.
Brickstone Cos. is striking Mellon Independence Center from the edifice at 701 Market St. and replacing it with a new, old name: The Lits Building.
Precise timing on the rebranding is unclear, but it will occur "sooner rather than later," Mark Merlini, a Brickstone partner, said Tuesday.
The name change comes amid signs that BNY Mellon may be on track to vacate the 718,000-square-foot Market East building in summer 2017 as it downsizes in Philadelphia.
BNY Mellon signed an 18-month lease for 104,222 square feet at the building starting Jan. 1, down from the 153,194 square feet it occupied until then, according to Morningstar Credit Ratings L.L.C. vice president Edward Dittmer, who coauthored a report on how the bank's departure would impact the property's $65.5 million mortgage.
"While we can't say for certain Mellon is going to walk from that building, it's a bit of a concern that they would only sign an 18-month lease," said Dittmer, who learned of the new lease's terms from the servicer of the building's mortgage.
BNY Mellon had already slashed its presence across town at the BNY Mellon Center skyscraper at 1735 Market St., where it reduced its footprint by 80 percent last year, to about 48,000 square feet. It also said last year in a filing with the Pennsylvania Department of Labor and Industry that it was laying off 280 workers at Mellon Independence Center.
Analysts have said the bank is trimming office rents and head count in response to demands for spending cuts by activist funds, including Nelson Peltz's Trian Partners.
A BNY Mellon representative did not respond to a phone message seeking comment.
Morningstar said in its report that the mortgage for the Lit Bros. property remains current and "could avoid default" despite the loss of its biggest tenant. Its borrower has until June 2017, when BNY Mellon's lease expires, to find a new tenant, the report's authors noted.
Merlini said the building's positive features, such as its recent environmentally conscious rehab, could persuade BNY Mellon to keep its offices there if it opts not to cut its Philadelphia workforce further.
Brickstone also is reconfiguring a large contiguous space that will include the 23,000 square feet now used for a data center by financial technology firm Fiserv Inc., Merlini said.
The expiration of Fiserv's lease in August will yield a 100,000-square-foot block that Brickstone can market to a tech tenant in need of offices and high-end server space, he said.
"We have several prospects," Merlini said.