Wilmington developer Buccini/Pollin Group is teaming up with a labor-backed financial partner to complete a long-languishing apartment project at the former site of National Products restaurant-supply business in Old City, known for its orange glazed-tile Art Moderne facade and stainless-steel signs.
The developer joined the AFL-CIO Building Investment Trust to buy the project from an affiliate of Old Hill Partners of Darien, Conn., in a deal that closed Friday, said Michael Hare, Buccini/Pollin's senior vice president for development. Hare declined to disclose a purchase price.
The partnership plans to start construction late this year at the now-empty 46,000-square-foot lot near Second Street and Elfreth's Alley, where the long-vacant National Products building had stood, Hare said. It aims to complete the six-story, 192-unit development by spring 2018.
The project marks Buccini/Pollin's first development venture in Philadelphia and its third multifamily investment outside its native Wilmington, where it is a major developer of office, residential, and hotel properties.
The company has long seen Philadelphia's multifamily residential sector as an investment target because of the city's increasing population of post-college- and retirement-age renters, Hare said.
Buccini/Pollin zeroed in on Old City because it is a "highly amenitized, interesting neighborhood," he said. "Historically, it's been underserved for luxury apartments."
The project is expected to cost about $70 million to develop, including the demolition work that took place under its previous owner. Buccini/Pollin will develop the project and manage the property once it is complete, with the AFL-CIO Building Investment Trust retaining ownership, Hare said.
A phone message left with the AFL-CIO trust, based in Washington, did not yield a response. The fund's previous projects in the area include a warehouse that serves as a historic archive in Northeast Philadelphia and the One Tower Bridge office building in West Conshohocken, according to its website.
The National Products building had sat mostly vacant since 1996, when it was shuttered by the family that had owned it for nearly seven decades. Since then, Philadelphia's Historical Commission approved at least five residential proposals for the site, though none had taken root until recently.
The current plan calls for the re-creation of the now-demolished building's orange facade and the replacement of its original signs.
Buccini/Pollin's other residential projects outside Wilmington are a 246-unit apartment building in Willow Grove and an 88-unit condo project in Ocean City, Md.
It also recently acquired a package of Philadelphia-area hotels that included the property now known as the Franklin Hotel at Independence Park, its first investment within the city itself.
Pete Davisson, a partner with real estate services firm Jackson Cross Partners L.L.C. in Wilmington, said that Buccini/Pollin has become a dominant force in real estate there since the company was founded about 15 years ago, but that it has had to look for opportunities outside the relatively small market to sustain its growth.
"Philadelphia is huge compared to Wilmington," Davison said.